Colorado Real Estate Journal -
The historic El Jebel building at the edge of downtown Denver’s central business district is back on the market. Conceivably, it could be the site of the next high-rise in downtown Denver. The 107-year-old building at East 17th Avenue and Sherman Street, as well as an adjacent site that has special zoning status that allows a 650-foot-tall tower to be built on it, is being listed for $11.5 million by Eric and Martin Roth of CBRE’s Land Services Group in Denver. The listing price is almost half of what a partnership that included Donald Trump offered for the parcel during the go-go days of the mid- 2000s. The Trump/Bayrock group planned a 51-story Trump Tower hotel/luxury condo project on the site, similar to the Four Seasons in downtown. “The Bayrock Group, in a joint venture with the Trump organization, had it under contract for $22 million,” recalled Wes Becker, part of the ownership team that purchased the building more than a dozen years ago for $3.9 million. The deal didn’t go through because one of Becker’s partners was dying from Lou Gehrig’s disease and “wasn’t comfortable” in selling at the time. The partner has since passed away. “As we all know, the world changed,” when Denver and the rest of the nation entered into the worst real estate downturn since the Great Depression began in 1929. El Jebel means “the mountain” in Arabic. The property, with the Moorish-styled, onion-shaped dome, has had only three owners since it was built. It was constructed to be the most elaborate and most expensive El Jebel Shrine temple in the world. In addition to its distinctive dome, the building includes an ornate two-story ballroom with a mezzanine that can seat 500 dinner guests or a 1,000-person cocktail party. The building is on the National Register of Historic Places and is designated as a Denver Landmark. It truly is a one-of-a-kind property, Eric Roth said. “The game plan is to offer it as a development opportunity,” Roth said. “The El Jebel building can be incorporated into another development opportunity,” Roth said. “It doesn’t have the height restrictions you would normally find in the Uptown neighborhood,” Roth said. “We think hospitality would be a good fit for the asset and maybe with a mixed-use and residential component.” Becker and his partners bought the site in November 2000. The previous owner had planned to develop the existing building into luxury loft condominiums. Becker’s group worked closely with architect David Tryba and Kathleen Brooker, then president of Historic Denver Inc., to preserve the iconic building. “From the time we acquired it in November of 2000 until early 2003, we worked on the entitlement process,” Becker said. In order to preserve the building forever, they donated the interior and exterior easements to Historic Denver. “I think that was the first donation of an interior historic preservation easement in the state,” Becker said. The zoning on the adjacent parcel at the time allowed a building up to 14 stories, he said. In exchange for preserving the historic building, they received a variance from the view corridor “that allowed for a high-rise up to 65 stories,” Becker said. After the Trump deal collapsed, a Denver group made a run at the site with a plan that would have included a 54-story tower, but ran into financing problems. In order to generate income, Becker’s group operates the historic building as an event center. “We host approximately 60 events there on an annual basis,” Becker said. “We’ve had a real variety of functions there. Former President Clinton spoke there once. A church uses the upper floor for services. And over the years, we have generated income from the parking lot.” The income has allowed them to maintain their ownership. “Generally, we have enough income to pay the property expenses and operating costs,” he said. “We have not had to come out of pocket very much, other than occasionally when the property taxes were due.” Of course, the income doesn’t come close to the financial reward they would have received if they had sold it to Trump for $22 million. “You don’t have to remind me of that,” Becker said. “We’ve held for such a long period of time that the opportunity for the condo market, once really strong, has come and gone,” he said. On the other hand, the market has improved so much that it appears to be a good time to sell. “Obviously, the apartment market is extremely strong these days,” he said. “There also appears to be a potential market for another hotel. A hotel is especially attractive for this site because you could incorporate the beautiful interior of the El Jebel building into a new hotel.” “And oddly enough, I hear the idea of some new condo projects are being batted around. There is simply no inventory downtown.” Also, he said with an estimated $1 billion in new hospital construction in the Uptown area, he expects that to be a catalyst for more commercial real estate and residential growth in the area in the coming years. Still, he doesn’t think today’s market could accommodate a high-rise on the site. “I’ve got a hunch it would still be an extremely difficult task to finance a high-rise on that site,” Becker said. “I suppose if someone had the cash available, they might go out and build some combination of a hotel and/or condos, or apartments, possibly with a mixed-use component on the site,” with the idea that it could later be expanded into a tower when market conditions warranted it, he said. “Long term, the zoning variance that allows a 650-foot-tall high-rise would be very valuable.” Eric Roth of CBRE said not to count out the site ending up being the home to Denver’s next high-rise. “I think it is a very unique project,” Roth said. “It is located in Uptown; that does not usually allow for this downtown-type of density.” The timing for a new tower could be right, he said. “The market is definitely moving in the right direction,” Roth said. “I do think somebody should be able to utilize that above-average density,” he said. The location also might prove to be an advantage, he said. “Right now, we are seeing a lot going on in LoDo and by Union Station,” Roth said. “If someone wanted to separate themselves from all of the other projects, this would be an area that would not have as much competition.” However, it will have something going for it that every developer covets. “They will have great views,” if they take advantage of the height, Roth said.