Colorado Real Estate Journal - November 5, 2014

Sprouts Farmers Market coming to Wheat Ridge site

by John Rebchook


Ground recently was broken on key site in Wheat Ridge that has long been considered blighted.

A 27,000-square-foot Sprouts Farmers Market, the first in the city, will anchor the site at West 38th Avenue and Kipling Street.

The development by Denver-based MGV Development also will include a 64-room senior assisted-living and memory care center by Morningstar.

Other retailers at the center will be Starbucks and likely a Sonic.

The project represents the city’s largest redevelopment effort in nearly three decades.

“I think the redevelopment of this site is critical in that it represents the first major redevelopment in Wheat Ridge in quite some time,” said Wheat Ridge Economic Development Manager Steve Art.

“The area really needs a grocery store and the senior care housing facility also is a very needed service,” he said.

The Sonic, which hasn’t yet signed a lease, was announced at the recent groundbreaking ceremony.

The city and the Wheat Ridge Urban Renewal Authority have been looking at the site for about 3½ years.

“The site was originally site of a Safeway back in the late ’60s and early ’70s,” Art said.

He said he thinks it closed in the late 1970s.

“It has been closed for quite some time, although I don’t think you would describe the area as a food desert,” Art said.

“Gold’s Corner Grocery is nearby and there is a King Soopers about a mile away,” Art said.

The site was considered blighted because of poor access and poor drainage, he said.

“It also had a couple of dilapidated buildings on the property that were torn down,” he said.

In April, the Wheat Ridge Urban Renewal Authority approved a tax-increment financing agreement with MVG Development for the redevelopment. This agreement included a $2.4 million loan obtained from Colorado State Bank and Trust that will be repaid through the incremental property and sales taxes generated by the project.

It also included a $1 million economic development incentive financed through general funds.

MVG will invest about $24 million into the development.

“I think this is a very important corner,” said Patrick Goff, Wheat Ridge city manager.

“I think a lot of folks drive by it and think that is a truly blighted part of the city,” he said.

He pointed out that the city had invested a great deal of money into Discovery Park across the street.

“Discovery Park has turned out to be one of the most successful parks in the entire metro area,” Goff said.

“It really has turned into a regional park drawing people from a very wide geographic area,” he said.

“And just to the north is a Wheat Ridge Recreational Center, which is another crown jewel,” Goff said.

Landing a Sprouts is a coup, he said.

“It really shows that Wheat Ridge can draw the kind of tenants that other cities want,” he said.

Only Wadsworth Boulevard is busier than Kipling Street in Wheat Ridge and West 38th Avenue is the busiest east-west corridor along with West 44th Avenue.

“The Sprouts will not only serve people in Wheat Ridge, but also folks driving home to Lakewood and Arvada,” he said.

Sprouts really drove the initial deal, when MVG began looking for a site for the grocer about 18 months ago, said Jon Rankin, a vice president and chief financial officer with the company.

“One of our development directors has a relationship with a real estate manager at Sprouts,” Rankin said.

Sprouts, he said, has had a great experience with its flagship store at West 38th Avenue and Wolff Street in West Highland in Denver.

“They really wanted another site on the west side, so we worked with their retail broker at SullivanHayes,” he said.

MVG also has a relationship with Morningstar, which also is familiar with the area and likes it, as it has a facility in Applewood in Lakewood.

“This is not your typical deal where you buy the dirt, build the grocery anchor and then you are kind of out of it,” he said.

“We kind of headed into a different direction than most developers could, because of our relationship with Morningstar,” he said.

Morningstar will operate the two-story facility and Morningstar and MVG will be part of the ownership entity.

MVG will own the retail portion, and Sprouts, Starbucks and the Sonic will be tenants.

“Sonic hasn’t yet signed the lease, but they were comfortable with me naming them at the groundbreaking,” Rankin said.

Other News



Fraser Holdings LLC, based in Washington state, recently paid $5.69 million for a 13,650-square-foot Walgreens at 2697 W. Belleview Ave. in Littleton.

Both the buyer and the seller, J&S Littleton LLC, based in California, were in 1031 exchanges, said Joe Rue, a CBRE broker based in Fort Collins. The transaction was handled by Rue and fellow CBRE team members Mike Eyer, Blake Craig, Julius Tabert and Kyle Lundy.

“The seller was doing an exchange for a brand-new Walgreens in Oregon and the other buyer, the guy who bought the Littleton store, had just sold a store in Michigan with a short-term lease and wanted a store with a longer lease,” Rue explained.

Walgreens has more than 15 years remaining on the building in Littleton.

The store drew seven offers.

“Buyers liked it because it is a great tenant, with a great site and a long-term lease,” Rue said.

Rue has a longtime relationship with the seller.

“The seller has been a client of mine for several years,” Rue said. “Our team helped him sell this and we are helping him buy his new store.” n An unidentified buyer paid $1.9 million, or $365.81 per sf, for a retail center occupied by Subway and Union Wine and Spirits at 295 S. Union Blvd. in Lakewood. The center was built in 1970.

Matt Ritter, Jeff Johnson, Peter Sengelmann and Cody Stambaugh of the Johnson Ritter Team at Pinnacle Real Estate Advisors LLC represented the seller in the transaction.

“After many years of running both the property and the liquor store, the seller decided he wanted out,” Sengelmann said.

“We were happy to help the seller sell both the business and real estate so he can enjoy more free time,” he said.

Tuesday Morning Inc., a home goods closeout retailer, signed a 10-year lease for 10,138 sf in the Parker Marketplace II shopping center at 18721-18741 Ponderosa Drive in Parker.

The 31,679-sf shopping center was built in 1997.

Matt Call and Heather Taylor of NavPoint Real Estate Group represented the landlord. Legend Retail Group represented the tenant.

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