Colorado Real Estate Journal - July 15, 2015
When the city of Wheat Ridge recently celebrated the opening of the Sprouts Farmers Market at West 38th Avenue and Kipling Street, a line of about 200 shoppers already had formed. “The response has been overwhelming,” said Patrick Goff, city manager of Wheat Ridge. A few days later, the Wheat Ridge City Council approved a $6.2 million subsidy for a 40,000-square-foot Neighborhood Market, Walmart’s grocery store concept, a three-minute drive to the east at West 38th Avenue and Wadsworth Boulevard. Some would say the response also was overwhelming, with about three dozen people protesting the tax-increment financing for the development planned by Quadrant Properties. The TIF would be used nearby infrastructure improvements for the entire development, which, in addition to the Neighborhood Market, would include another 40,000 sf in retail space and 37 for-sale townhomes by Denver-based New Town Builders. Improvements would include new sidewalks, gutters, landscaping and the removal of asbestos from blighted buildings that will be demolished. Some residents already are circulating a petition that would require a citywide vote for any tax-increment financing for more than $2.5 million, with hopes of putting it on the November ballot. “The City Council approved it and earlier the urban renewal authority approved it, so it is a done deal right now,” Goff said. Some people, however, are hoping if the TIF vote ends up on the ballot and passes, it would impact the Walmart deal, retroactively, he said. “That would need to be a legal determination,” Goff said. If the 40,000-sf Neighborhood Market is built, and with the 27,000-sf Sprouts in the Kipling Ridge Marketplace opened, there would be a variety of grocery stores on just about every major north-south intersection of West 38th, which Wheat Ridge considers its Main Street. There is already a King Soopers with about 70,000 sf on the eastern edge of Wheat Ridge at Sheridan Boulevard and about an 80,000-sf Safeway at 3900 Wadsworth Blvd., basically at the northeast corner of Wadsworth and 38th. “I don’t think Wheat Ridge is unique in this,” Goff said. “Interestingly, I was just noticing up at 80th and Wadsworth in the Arvada area that there is a King Soopers, a Safeway, a Walmart Supercenter and a Natural Grocers all within the same area.” He noted that municipal boundaries mean little to grocery chains. They are more interested in being at Main and Main. “Grocery stores probably have the biggest hold on the retail market these days and when they are expanding, they want to be at the best intersections,” Goff said. Cities such as Wheat Ridge love them not only because they provide an amenity to residents, but also because they are big sales tax generators. “I can’t break out sales tax information for specific stores, because that is confidential,” Goff said. “But they are in the top five, or maybe the top eight, in terms of tax generators. They are easily in the top 10.” Wheat Ridge itself covers about nine square miles and many of its grocery stores are on the periphery, either with Denver or cities in Jefferson County bordering them. “I suspect the King Soopers at Sheridan gets a lot of business from Denver residents in the West Highland area,” he said. And stores on the western border probably are convenient for people who live in Arvada and Lakewood and are driving to employment centers such the Federal Center. He said it is good to get the tax generations from people who live outside Wheat Ridge, as in Colorado sales taxes fund the operations of many municipal functions. “I would think stores more in the interior are primarily neighborhood stores,” such as the Safeway on Wadsworth, just off West 38th Avenue. Goff lives near the $28 million Kipling Center redevelopment that includes the Sprouts and is the biggest redevelopment in Wheat Ridge since 1987. “I drive by it all of the time and the parking lot is always full,” Goff said. MorningStar Senior Living, a 64-unit assisted living and memory care center on 2.3 acres, is under construction and set to open in January at Kipling Center. As part of the redevelopment efforts, Denver-based Confluent Development provided significant public improvement. Improvement included removal of various blighted buildings, upgraded street improvements on Kipling Street and 38th Avenue, and a new storm drainage system to replace the aging system. “Kipling Ridge is a textbook example of how a public-private partnership can create and transform a blighted corner into viable mixed-use project that the community of Wheat Ridge can be proud of into the future,” said Greg Moran, senior development director of Confluent Development. In 2014, Confluent Development, with the assistance of the city of Wheat Ridge, assembled four parcels with separate ownerships to create Kipling Ridge Marketplace. The project replaces a dilapidated cluster of predominantly vacant buildings that had become an eyesore to the community and lacked any significant retail sales tax generation to the city. Confluent Development is planning a 4,500- to 6,000-sf, multitenant retail shop on the last remaining parcel on the 0.62-acre site anchored by the Sprouts. Courtney Key with SullivanHayes is handling leases for the center. In addition to the Sprouts, Starbucks has opened a new 2,100-sf store, replacing the smaller one that previously was on the site. Meanwhile, as far as the Wadsworth and West 38th Avenue site, Goff noted that in the past two or three years, four developers have come up with conceptual plans for the parcel. “Three of the four had a Neighborhood Market,” as the anchor grocer, Goff said. “One of the four called for a Whole Foods, but when the Whole Foods site selection people looked at it, they said they wanted to be farther to the east and closer to Denver. “So the market seems to be saying that is a site best suited for a Neighborhood Market.”