Colorado Real Estate Journal -

Anschutz, Fitzsimons exceed expectations

by Jill Jamieson-Nichols

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No one could have predicted the rapid pace of growth that has occurred in and around the Anschutz Medical Campus over the past 12 years.

“Every time we bring people out here, their jaws are dropping. They just can’t believe it – and how beautiful it is,” said John Harney, president and CEO of the University of Colorado Hospital.

UCH, with 1.79 million square feet and another 734,000 sf under construction, realized soon after moving to the Anschutz campus in Aurora in 2007 that there was more demand than anticipated for patient beds. “From the time I came, which was eight months after the hospital opened, they were already short on beds,” said Harney. “It continues to grow 5 to 6 percent every year.” Growth at Children’s Hospital Colorado also has outpaced expectations, leading to construction of a new, 10-story, 350,000-sf tower slated to open by year-end. Both its tower and the 12-story UCH facility will include “shelled” space so that more beds can be added as needed.

Denise Brown, who spearheaded UCH’s move to Aurora and until recently served as interim director of the Fitzsimons Redevelopment Authority, said there were hopes in 1998 that the former Fitzsimons Army Medical Center at Interstate 225 and East Colfax Avenue would yield 6 million sf of development. Including 2.83 million sf of University of Colorado academic and research facilities and the 1.1 million-sf Denver VA Medical Center under construction at the edge of the Anschutz campus, nearly 9 million sf of development exists or is under construction, according to Michael Del Giudice, director of the office of institutional planning for the University of Colorado Denver|Anschutz Medical Campus.

“There aren’t many places in the country where you have three new hospitals being built in less than two decades, and a new health sciences school and other development, all in one square mile. It’s a significant development in the United States, and all state-of-the-art facilities,” he said. “It has grown tremendously, and it’s slated to grow more.” “We’re finding that the development needs to be dense and lot more square footage than we originally planned,” said Brown, who continues to work with the FRA as a consultant.

“Demand for the space as a result of the success of the partners is well beyond what we envisioned. We’re dealing with the issues of success.”

Fitzsimons Life Science District

The Anschutz Medical Campus, which comprises the University of Colorado School of Medicine, UCH and Children’s Hospital, is south of Montview Boulevard, while the land predominantly to the north makes up the Fitzsimons Life Science District. The district includes the 60,000-sf Bioscience Park Center, a facility for startup life sciences groups that is adding 37,000 sf of accelerator space for companies ready to take their research to the next level.

Also in that area are the 126,000-sf University Physicians building, a Children’s Hospital child care center and the Pauls Corp.’s Fitzsimons 21 apartments, with 240 units, 188 under construction and another 172 units planned.

The FRA originally planned for 3 million sf of development in the Life Science District, but doubled that to 6 million when it teamed up with partner Forest City to develop most of the remaining land, 180 acres, as the Colorado Science + Technology Park at Fitzsimons. “Personally, I wouldn’t be surprised to see that amount increase over time,” Brown said.

The value of the bioscience park is to emerging and midsize life sciences companies that can benefit from being in close proximity to the Anschutz campus. CU’s Anschutz and Boulder campuses spin off nine to 12 bioscience companies a year, and another three to four come out of Colorado State University annually.

“Even during this tough investment environment and tough economic environment, we’re still seeing a very healthy pipeline of companies being created in Colorado. Growing these companies to viability is the main attraction of an industry park located next to the university,” Brown said.

With early stage companies growing and maturing, a “bottleneck” is opening up, and, “I think we’re going to see an increase in the interest by private companies to locate on the site.” But Brown added the FRA has come to the realization that, for the life science industry, the bioscience park itself may actually need to be smaller, say 80 to 100 acres – and there is discussion about what complementary life science uses might be appropriate for a portion of the land. “I think everyone finds it refreshing that there’s more land in play for the health science-based campus than we all envisioned 15 years ago,” she said. “There are going to be huge science evolutions, and we’re going to need land for things we can’t envision today.” Within the last year, the FRA has restructured its board to include representatives of the biosciences industry, as well as developers John Shaw of McWhinney and Trammell Crow’s Bill Mosher. It created a strategic plan that includes using land jointly with partners at the Anschutz campus and hired Steve VanNurden from the Mayo Clinic as its president and chief executive officer.

“I think there’s a sense of excitement,” said Brown, who added that while there has been an “inward” focus on Anschutz Medical Campus and Life Science District, “What’s happening now is the campus is becoming more mature, and there’s more of an outward turn to the boundary area.”

Neighboring Development

The Pauls Corp.’s apartments have been “wildly successful,” and it helps that Stapleton is close, but housing remains an issue. There also is a need for additional retail and hotel rooms, and the city of Aurora has seen interest for medical office building development.

Corporex Colorado hopes to break ground on a Hilton conference center hotel across Colfax at Fitzsimons Village early next year. It also is marketing a second office building west of the 168,000-sf building it developed for Children’s Hospital Colorado and sees future demand for more retail, as well as multifamily, research, and medical office on more than 20 acres of development ground it controls. “At the end of the day, I think that there’s probably a million and a half square feet there,” said Corporex Colorado Senior Vice President Mark Witkiewicz.

Owners of smaller properties on the south side of Colfax also are preparing land for development, and a former motel site once slated for a hotel that stalled during the economic downturn is being offered for sale, according to Andrea Amonick, city of Aurora manager of development services. On the east side of the Anschutz Medical Campus, private developers have been eyeing older apartment buildings for possible rehabilitation.

“We’ve had a lot of people coming in to talk to us about opportunities in the area,” said Amonick.

The University of Colorado is in the process of updating its master plan for the Anschutz campus, and the city and other stakeholders are part of the process. With the huge number of jobs – 16,825 – at the Anschutz Medical Campus alone, there are traffic issues, as well as issues regarding connectivity to the surrounding area.

There are two light-rail stations planned at Fitzsimons, but with FastTracks funding falling short, Aurora is hopeful an effort to allow private partners to build out the I-225 corridor will move forward.

The city will be applying for funding through the Denver Regional Council of Governments to improve pedestrian crossings on Colfax, and it’s involved in a major traffic improvement project with the Colorado Department of Transportation and Regional Transportation District for a new overpass above the Union Pacific Railroad and East Corridor light-rail line at Peoria and Smith Road, said Planning Director Bob Watkins. The area is a major entryway to the Anschutz campus and Fitzsimons from Interstate 70.

An Economic Engine

According to Del Giudice, employment at the Anschutz Medical Campus supports 32,400 to 35,700 jobs in Colorado, representing income and spending of $3.8 billion to $4.6 billion.

Current construction accounts for approximately 8,400 jobs.

UCH will add 1,400 high paying jobs with completion of its expansion, and Children’s employment also will increase, as will the number of patients and visitors. The VA Medical Center, which will have units to treat post traumatic stress disorder and spinal cord injuries, will have 2,150 employees and will see 83,000 to 85,000 patients per year.

Future construction at the Anschutz campus is expected to include a more-than-100,000-sf multidisciplinary research clinical academic building and the Marion Downs Hearing Center, which will be part of UCH.

That the hospitals, and research and educational facilities that make up the Anschutz Medical Campus and Life Science District have land for expansion make Aurora’s “health care city” unique in the country. “That’s a once-in-lifetime opportunity,” commented Brown.

From a regional and statewide perspective, the impacts are huge for the economy and patient care.

“We hope that this part of Colorado will continue to grow and expand to serve the needs of everyone in the state,” said Del Giudice. “What grows in one area nudges another area to grow and expand – and create more jobs and more science – and really helps the region.”