It's time for this biweekly meeting of the Finance and Business Committee of Denver City Council.

Join us for the Finance and Business Committee starting now.

All right.

A little bit of feedback.

I think.

But I can hear myself.

All right.

Welcome everybody.

Welcome to Finance and Business Committee.

We're just coming off the hills of Mayor Council, so apologies for starting just a little bit later than we anticipated.

My name is Serena Gonzalez-Cutierez.

I'm one of your council members at large and chair of the Finance and Business Committee.

Today is Tuesday, August 12th.

I'm gonna have uh my colleagues go ahead and do introductions and then we'll go into today's agenda.

So with that said, I'll start over here to my right.

Good morning, Chris Hines, Denver City Council District 10 or Denver's 10.

Under Caffeinated and trying to call Cash from South Denver District 6.

Just got my caffeine.

Diana Romero Campbell, Southeast Denver District 4.

Good morning, Darrell Watson, representing the Fond, District 9.

All right, great.

Thank you, everyone.

We have uh one agenda item uh on the agenda today as far as for action.

Um, and we have a few items on consent.

So I'm going to go ahead and turn it over to uh Tracy who's joining us.

If you can introduce yourself and um go ahead and proceed with the presentation, I'll be um keeping track of the queue.

So if there are questions from council members.

Happy to do so.

Good morning, everyone.

Uh Tracy Huggins, I'm the executive director of the Denver Urban Renewal Authority, bringing for your consideration this morning the amended and restated urban redevelopment plan for the 27th and Larimer urban redevelopment area.

So, as I said, this is an amended and restated urban redevelopment plan because in November of 2022, City Council adopted the original 27th and Larimer Urban Redevelopment Plan, which did a number of things.

It established the urban redevelopment area, and in doing so, council found that the area was blighted, consistent with the uh statutory definition.

It found that that urban redevelopment plan conformed to Denver's Comprehensive Plan 2040 and its applicable supplements, and it also found that the area was appropriate for one or more urban redevelopment projects, including a project that I'll describe here in just a moment.

The majority of the property in the area is located within a full city block formed by the boundaries of Larimer Street, 27th Street, Lawrence Street, and 26th Street.

And then as you can see, there is a smaller portion of the area that is located south of 26th Street along the northeast side of the 2500 block of Larimer Street.

Gonna give just a little bit of background here.

This at the time included entering into an affordable housing agreement with the city that requires 10% of the um residential units to be affordable to households at uh no greater than 50% of AMI.

And then they also made several other public benefiting commitments, including uh a commitment to create a 10,000 square foot publicly accessible outdoor plaza in the middle of the development program to implement an affordable business incubator program that includes offering commercial space at significantly reduced rents with an emphasis on growing small BIPOC and veteran-owned businesses.

And then also a commitment to renovate the VOA headquarters that were and continue to be located on the site to allow the nonprofit to continue to operate in this community.

They also committed to repair and integrate the existing facades into their design.

So with that then, I think I've covered all of the background stuff.

So with all of that in place, Dura brought forward the original urban redevelopment plan with a project description in the plan that read as you see here.

The development of it was really mixed use with the development of several multi-story buildings that will provide a mix of uses contemplated to include retail residential, including the commitment to the affordable units, public accessible outdoor plaza, and below grade parking.

And as they had originally contemplated, they also allowed for the VOA to retain ownership of their renovated space in the headquarters as well as again the 30 spaces of parking for the VOA.

But due to the general and financial market conditions, the project that was originally defined in the plan has just not been feasible.

And the area, since it's been a number of years and nothing has happened, the area does continue to deteriorate.

So from 2022 through the middle of 2024, the developer attempted to secure a partner to construct the residential of the residential portion of the project, but they just were not successful in doing that.

So in early 2025, they proposed a revised project that focused on the adaptive reuse of some of the buildings on the site to create new retail space, to build a new retail and specifically a grocery store building on the south and northeast portion of the site, replace the originally contemplated below grade parking with surface parking, keep the open space square footage and the office space as they had originally contemplated, and postpone.

I don't want to say completely ignore, but really emphasis on postpone the residential development until market conditions were more favorable.

Do you want to note that they have been able to secure the financing for this newly divide, newly defined reduced project scope?

And so, in order for us to remain and maintain consistency between what the plan says, the project defined and the amount, and the way that Dura would support the project, we are bringing forward this amended and restated plan that will do two things.

It will amend the project description and then it will make the necessary conforming changes to those sites regarding plan compliance plan between the urban renewal plan and the other city approved plans.

So the first of those changes is that of the project.

So I already described what the original plans, how it defines the project, and this is how the amended and restated plan would define the project.

And it would mean the adaptive reuse of several existing buildings and the development of new buildings in the area that will provide uses contemplated to include retail, commercial, still the publicly accessible outdoor plaza, and site improvements.

So as you can see on the chart to the right, the revised project consists of about 60,000 square feet of retail space that will include a grocery while maintaining the 10,000 square feet of publicly accessible open space and the office portion of the original project.

The space that was planned for the residential buildings and the below grade parking will become surface parking for the project.

The existing buildings along Larimer Street between 26th and 27th will be adaptively reused.

A new building will be constructed for the grocer on the corner of 27th and Larimer, and the existing buildings between 26th Street and 25th Street will be demolished and replaced with new retail storefronts.

Every urban redevelopment plan must link the urban renewal plan objectives, including the defined project to the city priorities and goals that are described across the applicable plans, including Plan 2040, Blueprint Denver, and in this instance the Northeast Downtown Neighborhoods Plan.

And the original urban renewal plan focused on goals related to mixed-use development, including the development of housing.

The amended and restated plan removes the goals specific to housing because that will not be a component of assistance provided by the urban renewal authority, and instead reinforces the goals specific to adaptive reuse.

The amended and restated plan was presented to Planning Board, who unanimously found it to be in continuing conformance with Plan 2040, Blueprint Denver and the Northeast Downtown Neighborhood Pans.

With the change in the project scope, Dura did re-underwrite the need for tax increment assistance necessary to support this phase of the project.

The original TIFF commitment of approximately 19.6 million has been reduced to approximately 9.3 million dollars.

These amounts represent and still represent about a 12% amount of the total project budget, and just as in the original project, the revised project use of tax increment will be used to reimburse those costs that are directly addressing the blighting conditions found on the site, as well as to support the development vision.

So I talked about the things that are going to change.

The definition of the project as well as the plan conformance site.

So let's spend just a moment talking about the things that are not going to change.

The boundaries of the urban renewal area will not change.

The boundaries of the tax increment area will not change.

And the timing of the tax increment will not change.

The same 25-year clock that started tolling in the end of 2022 continues to run, making the latest expiration date 2047.

In addition, as you know, we are required any time we are looking to utilize property tax increment to enter into agreements with the other property taxing entities regarding the use of the increment attributable to their mills.

No changes are being contemplated in regard to any of these agreements either.

So with Mile High Flood District, we are still in a position to be able to collect and retain all amounts attributable to the mill that they levy.

With the Rhino bid, we are also looking to keep that agreement completely as is, where any amount of incremental taxes that we collect that are attributable to the bids mill levy, upon collection, we just pass over back to them.

And then with Denver Public Schools, again, no change to that agreement.

We are able to continue to collect and retain the amounts attributable to the DPS mill levy.

In addition, when we first undertook the agreement with DPS, it included the expectation of there being housing on the site.

And so with that, DPS had calculated a $3.4 million potential impact to their ability to deliver services with this residential in place.

And because the use of the property tax increment, including that of DPS, is being utilized to remedy the blight that will further enhance the likelihood of that housing being ultimately delivered.

We felt it best to continue to honor the terms of that agreement with DPS, and so we Dura will continue to pay over to DPS that $3.4 million over the term of the tax increment area.

I also just want to note that these are specific to Dura and the Dura agreements.

But there are other things, as I mentioned previously, that the developer has agreed to do as part of the rezoning that still are in place and will need to be honored as the project moves forward.

They are, let's see, even they've, in addition to getting the financing necessary to do this, they've also done a number of things that were anticipated as the project first brought forward.

Specifically, they have worked with the VOA after they acquired their kitchen and warehouse space to move them into new space in order for them to really meet the needs of their clientele.

They've already included the uh refurbishing of their headquarters building at the building at 27th and Larimer, and they will continue to be held to those same expectations regarding those other community serving outcomes, including the affordable housing at such time as that is brought forward.

From a schedule standpoint, as I already mentioned, uh the amended and restated plan was presented to planning board in mid-July.

The Dura board approved the plan at their July meeting here today, asking for your uh consideration in anticipation of being able to move forward to full council consideration, including a public hearing on September 8th.

Dura always works really closely with the developer and the city before bringing any urban renewal plan forward to um to city council for your consideration.

And in most of these plans, the project that is contemplated is what is actually ultimately delivered.

But in these uncertain and challenging economic times, that isn't always the case, and that is really what is happening here.

As I noted at the beginning, this is an area that continues to be blighted and is uh continue therefore to create challenges for the neighborhood.

This first phase of the project, um, including the delivery of the retail component and in particular a grocery store, and their continued commitment to the VOA and the other community uses, are really important undertakings that, quite frankly, cannot be accomplished without tax increment support.

There's still a strong desire and expectation from the developer to deliver the housing phase, and that opportunity will certainly be enhanced by allowing them to move forward with this initial phase.

I really appreciate your consideration of this, and I'm happy to answer any questions you may have.

Thank you so much, Tracy.

Going in the queue, I know since this isn't in District 9, I'm gonna start off with Councilman Watson who's in the queue, and then to Councilman Heights.

Uh thank you, uh committee chair, and first and foremost, um Tracy Huggins, thank you so much for the clear, succinct um discussion.

Uh this could be seen, felt as uh absolutely uh a complex process.

Your stuff is complex.

Um, but uh I I appreciate the clarity of the transition to this based approach uh to the work that your team is doing with community and with the developer and kind of the succinctness of your presentation.

Uh I have to highlight one of the things I found to be uh really creative that you and your team did was ensuring that the agreements with other taxing entities, which was um a cause for a little pause for myself, especially to DPS fees, because that was hard thought and hard discussed in 2022, even though I wasn't on this council.

I came to speak in favor and I participated in the community process um in 2021 and 2022.

Um that was a uh a tough discussion for DPS, and I appreciate the commitment made.

I was curious, uh, Madam Chair.

May I ask the developer to come forward and answer a few questions?

Yeah, that's fine.

Um from Eden's, I believe we have someone.

Do you mind introducing yourself and I have maybe uh one or two questions for you?

Yeah, my name is Thomas McCarsick, managing director of Eden's owner and developer of this subject property and properties in next door.

Uh Thomas, thank you so much for your collaboration with my office.

Uh, first question for phase two uh development of um the housing.

Can you speak to um council and to the folks that are watching um your level of commitment, your expectations, and maybe provide some color uh around um some of the points of Tracy made as far as the steps you took since 2022 to actually meet the initial um phase one expectation about?

Yeah, so our belief this site should be mixed use and vertically integrated, but at this moment in time, the market conditions don't allow that uh in order to remove that blight.

We looked at this interim phase so that we could remove the blight, bring the activation that we're hearing from the community, the neighborhood service and retail, so that in the future, um, which might be 15 20 years, depending on where the market goes, um, the ability to bring back that density, bring that affordable housing at that 10%, uh, 10% of those units at 50% of AM, which would be covered in for 99 years.

So that commitment there is continues, and as soon as we deliver that residential to bring that for affordable housing when that market can market allows.

Dallas, can you also speak a little bit to uh the commitment, which once again was um discussed in great detail in 2022 about the uh the uh spaces for retail and the long partnership with BIPOC small businesses that you currently have uh up and around that block, but also on this new development talk through how that continues with this change.

Yeah, it continues to be extreme importance for us of our 40 tenants across the street um between Lamer and Walnut, about 40 49% of them are BIPOC.

Um, is it extremely important for us as we bring in local retailers, really what's creates what the neighborhood is, creates the uniqueness of the neighborhood and draws retailers having that balance between a national and having local having that synergy between those, but really a place is not nothing without those locals and having the support of the neighborhood and the organizations we've been working with and to continue to find new businesses that open up within the neighborhood as well.

And final question on community process.

Can you elaborate on what that community process has looked like with the iteration of this um possible change for our phased approach for his Dora project?

Yes, we've had um multiple meetings with Curtis Park neighborhood uh at their uh monthly meetings.

Um we just had a meeting of a little over 30 days ago with Tracy going through the updated Dora.

Prior to that, we had walked through the updated plan scope uh that remove the housing to bring activation today, and what we heard from the community in those meetings where they wanted to remove that blight today, get activation in the neighborhood servicing retail was a huge focus, and our goal is to bring that as quickly as possible to the neighborhood.

Did you say grocery store?

I mean, that is insane.

Thank you so much, Thomas.

Thank you.

No more questions.

Okay, thank you.

Uh Councilman Heights.

Uh thank you, committee chair, and uh and thanks for allowing Councilmember Watson to jump the queue.

Because no, I mean, I was gonna ask a question, and I think some of the context that you helped remind me of helps me frame the question.

So uh Director Huggins, uh you probably know that uh the city of Denver is the third most expensive housing for rental market in the nation.

Um, we just passed um uh new ordinance abolishing parking minimums here in Denver because we have a housing crisis, not a parking crisis.

Um, so on its face, it seems a little strange.

And I would say the second thing, um, Cherry Creek's a national anomaly in that there are um a bunch of uh office buildings that are planned and under construction in the neighborhood of Cherry Creek.

Pretty much everywhere else.

Um, you know, office construction is has halted.

So I think without the context that Councilmember Watson has that Eden's uh has um, I think people would be confused.

Why wait a minute, we're putting housing on hold and we're greenlining um uh uh businesses.

So I think um, will you uh Edens, will you kind of talk?

You mentioned that 49% of the the um uh the businesses are BIPOC.

Uh will you talk about?

I I think at one point you hired someone whose job was to go find uh BIPAC businesses to locate here and you know just uh add additional color about why these businesses are not the same as everywhere else in the nation and why it does make sense to to continue forward with business redevelopment and not residential.

Yes, so um our leasing Morgan Parker, who uh has been in Denver for the last five years, leasing the asset, really going around finding those best things up and coming locals um to bring them to Rhino, the draw of over about three million people come to just Denver Central Market.

So the expectation of people coming to the neighborhood and seeing and experiencing those retailers, having that synergy between those national and that local, but really going out to those farmers markets, going to um outskirts to see someone that's wants to start a business, trying to help them start a business because it's really really hard to start a business, and now over the last three, four years getting a loan for starting a business has become extremely hard.

So utilizing um very conditioned spaces so it's easy for retailers to enter to get a footing and so that they can grow versus taking a long risk and minimal capital outlay because right now they do not have that capital.

But it's really who's walking around and picking and finding and talking to the community to find those new up-and-coming businesses.

That's how we're we're sourcing those.

And Patagonia is still there.

How do you own it's still there?

So it's so people will maybe come for the name recognition of Patagonia, but stay, and uh, and perhaps uh invest additional sales tax dollars into our city by learning a bit about all of these locally minority owned businesses.

Yes, I that's the combination of that national and the local.

Really, the draw can be that national that gets them there.

But what really makes it unique is having those local businesses there, and so you can go see a Patagonia all across the country, but as you go to small businesses, you're not gonna see that.

So when you come, you might come just from Patagonia or come for Denver Central Market and you experience everything else around.

So with this additional 60,000 square feet, we'll have about 200,000 square feet of retail that really synergistic with each other to continue to drive uh the neighborhood there.

But be a good person would be an example of that.

So that's one of the current retails that are there near Central Market that is in partnership of this elevating uh black owned businesses, green spaces, which is one of the beneficiaries of DDDA's first hundred million dollars um grants.

That's going to be now downtown as well.

That's another one.

So you go to Patagonia, you go to some of these um national brands, but then we discover be a good person and becomes a national phenomenon.

Everyone's wearing be a good person shirts.

That's because of the development initially um targeting black business owners around central market um that the Eden team um began um prior to 2022.

Yeah, and I mean that's a great plug for the DDA and downtown and downtown everyone's neighborhood.

So wouldn't it be great for you to see be a good person uh on 16th Street and you say, Where are you?

And then you go up to uh you know to this location and see them again, and so now we're getting people in everyone's neighborhood as in downtown to go back to other uh businesses that are are located elsewhere in the city of Denver.

So I just think that um that additional context is is important because on its face, no to housing, yes to business, seems um quizzical to you know, to someone without that additional context.

So thank you, Director Hunning.

Thank you, Madam Chair.

Thank you.

I do want to make sure I recognize council president Sandoval did join us a little bit earlier.

Um, and I don't see anybody else in the queue.

So I'm actually have a couple questions, and I'm sorry to make you have to come back up and um but can you um can you tell me when you said you had the community meetings and you um had mentioned the Curtis Park RNO?

What were the other um I guess engagement opportunities with community that you had?

Other meetings that we had so working with the rhino arts district and engaging with that community and with the design committee on our plans.

Uh, we've had um our activations and community engagement.

We have about a hundred activations on our property across the site next to Denver Central Market a year, so engaging with the community, understanding uh what's missing, what what we're seeing, uh analyzing data, but really uh hearing from the community from those one-on-one conversations and dialogues outside of those larger meetings of what are we missing in the neighborhood?

Um, how do we continue to drive people to this place?

Our ultimate goal is to drive people to our places three and a half times a week and have them spend 90 minutes every time they come to our place, and so really to draw that many trips really really demands the kind of neighborhood servicing retail and ability to uh engage with seating and activations with movies to spend over 90 minutes every time you come so really focused on how can we get bring people more back to the property more and more each week um so I how many like I actually like residents were part of those conversations like people that live in the area as opposed to like business owners and folks like that within the Curtis Park meetings um each meeting um we had um probably 30 people um in person or online at our meetings um and then the Rhino arts district more the internal committee uh that was then communicating out but um the Curtis Park has been that massive port and then walking all the neighboring uh owners and talking through the project because we are doing some undergrounding of utilities giving some updates there of when that work's coming this is what you're gonna be seeing and feeling because the townhomes really behind um on 20 on 26th Street um are really in the face of that that project and we share that alley that goes to the smaller block so engaging with with them one on one in those um giving those updates and providing color and answering any feedback and concerns and staying very close um because we're as we move through the project okay thank you for that and um can you go into a little bit more detail as to why building housing was not feasible um what what was the issue yeah um we spent over two and a half years working through trying to find a residential partner um based off of the interest rate increases really when the project started um required returns for residential development increased over 150 basis points um which with the reality of where construction costs are indever today uh with the glut of supply that we have in the Rhino neighborhood where rents are that there's no way even without any land value to build with subgrade parking residential units and still be able to hit those required returns um for a residential project okay and I know Tracy you said that it's not completely off the table it's paused and so is that is there some potential or anticipation that perhaps where the parking is going could end up being developed into housing maybe someday if things were more feasible.

Yes and depending on the exact timing it could be exactly the same project that we originally intended um just depending on when the market comes back.

And will that parking be free parking free of charge or will it be charged?

It would be um using some sort of validation restriction just so that we don't have people sitting there all day long.

But it's really working in partnership with our retail partners of how do we keep keep it reasonable for tenancy so through a validation program so that we keep it free and flowing but um so that anyone can come to the location.

So then it will be charged or it won't be charged there would be some sort of validation um if it was charged for a certain amount of time so you're it's uh clear whether or not you'll charge you'll have at first it would not be charged but if we have an issue with that's we would have to manage um so that parking can be as free free and available for everyone okay thank you so much that's all I have thank you um any other questions from council members okay um this is an action item do folks um need a roll call vote no roll call vote all right this will be oh yeah I need a motion okay we have a motion and second councilman hein's second uh motion by councilman watson and this will go forward um to the full body thank you um with that said we had two items on consent those will also move forward um to the full council and we are adjourned