Colorado Real Estate Journal - September 2, 2015
Veteran Denver developer Susan Powers had ridden her bike past the old, brick building on a site along the South Platte River many times. And like just about everyone else, she had seen the building while driving south on Interstate 25, near the Sports Authority Field at Mile High. The brick building was hard to miss, given its photos of children on the exterior with a warning that “Lead Poisoning Hurts Kids” in big, red letters. Now, Powers, principal of Denver-based Urban Ventures, and Tim White of Castle Rock-based White Construction own the 3.2-acre site anchored by the three-story warehouse at 1401 Zuni St. They are redeveloping what will be a $50 million, mixed-use development, called Steam on the Platte. “I am drawn to these projects that are forgotten or have never been discovered,” Powers said. On a recent morning, Powers and White, founder of his namesake construction company, toured the building and the property with the Colorado Real Estate Journal. What really put the building and the site in perspective are the views from the roof of the three-story building originally constructed in 1928. From the roof there are unobstructed views across I-25 of downtown’s skyline and construction cranes, the state Capitol building, the football stadium and the South Platte Valley. “I’ve never been up here before, but I’m definitely coming back up here,” Powers said after crawling through a makeshift ladder through a trap door in the roof. “You really do have this 360-degree, unobstructed view corridor,” White said. “This is a view that really doesn’t exist anyplace else and you have never seen before,” White said. The 65,000-square-foot building anchors the site. The building was once a center of the bustling rag-baling business. Indeed, there is a giant rag-baling machine that rises through all three floors, which they will preserve with the help of tres birds workshop, the project’s architectural firm. NIMBL, a fast-growing SAP, or system application products, consulting firm in Denver, will be the anchor tenant for the renovated warehouse, initially taking 20,000 sf. “This redevelopment is aligned with our core values for revitalization, discovery and leadership,” said Yosh Eisbart, CEO and co-founder of NIMBL. “We embrace the project’s old-and-new impact and are excited about being part of a major activation within this historic neighborhood,” Eisbart said. In addition to the warehouse, an existing building that features a bowstring roof next to the river will be home to a restaurant along the Platte River. The restaurant is expected to open in late 2016 or in early 2017. Other ramshackle buildings on the site will be razed. Ultimately, the site could include a housing component. The site is zoned for five story buildings, but the city’s master plan calls for zoning for up to 12 stories. “If we decide to seek a rezoning, I don’t think we would go higher than eight stories,” Powers said. For now, they are playing it by ear. “We want to see what happens with NIMBL,” Powers said. It is possible that so many companies will want to be near NIMBL that it largely will become an office center, Powers said. However, there absolutely will be a restaurant along the banks of the South Platte. Hayden Hirschfeld and Dorit Fischer of NAI Shames Makovsky are marketing and leasing the project. “We’ve had a ton” of restaurants and beer gardens already wanting to operate out of the building along the river, Powers said. Powers said the city has been very encouraging to open up the space to the river, which is now enclosed by a fence Across the river is Sun Valley, one of Denver’s poorest neighborhoods. The Denver Housing Authority has bought much of the land across the river from Steam on the Platte. “Sun Valley is the highest priority of DHA and the city,” Powers said. That’s exactly right, according to Paul Washington, Denver’s economic development director. And Steam on the Platte will play a big role in helping to revitalize the area, according to Washington. “Steam on the Platte is a catalyst for both the redevelopment of Sun Valley and the Platte River, which are high priorities of Mayor Hancock,” Washington said, when Powers first announced the project. Pedestrians, bikers and motorists can easily cross the river on Old Colfax Avenue, just to the north of the site. The site is walking distance to Sports Authority Field and the Auraria campus and is minutes from downtown. RTD’s FasTracks West Corridor is along the southern edge of the property. In fact, RTD has right of way just to the south of the Steam on the Platte site that the joint venture formed by Powers and White likely would buy when RTD decided to sell excess property it required for FasTracks that it doesn’t need. “We would be the logical buyer,” Powers said. Also, just south of their property is the Xcel Zuni steam generation plant. Xcel plans to raze the current plant and replace it with a much smaller, more efficient facility. That site also could be a future development opportunity for them, Powers speculated. “I hope they keep the smokestacks,” she said, noting other cities have built housing around smokestacks. Powers and White initially were pursuing the acquisition of the site independently of each other. When they learned they were both interested in it, they decided to join forces. “I had never worked with Tim before, but now I feel like I’ve known him for years,” Powers said. They share the same values of preserving and breathing life into older buildings and they aren’t afraid of tackling projects that might scare off others She said the deal was probably a bit too big for her to tackle on her own. “I also felt like it was probably a bit too big for us to do on our own and I really wanted someone with a lot of development experience, like Susan, as a partner,” White said. He likes that it isn’t a typical deal and has a lot of challenges. “I like these deals that have a bit of hair on them,” he said. “These are the kind of deals a lot of other people stay away from,” he said. He also likes that it is not preordained how the development ultimately will take shape. “I really like that it is sort of this clean canvas where we can create whatever we think is the best use for the site,” White said. There is not only a story behind the building and the site, but also a story behind the acquisition. They bought the parcel from the estate of a late Englewood-based real estate agent Arvin Weiss, who in 2008 had been sentenced to seven years in federal prison after being convicted of fraud and witness tampering in a sophisticated scheme to cheat mortgage companies that funded federally insured home loans. “We had looked at it several years ago,” when Weiss was in prison and a judge wouldn’t let him sell it, Powers said. Then, Weiss was diagnosed with cancer and released from prison in 2013. “When I met Arvin, he was really frail and had just fallen and broken his hip,” White said. “I never met Arvin,” Powers said. After he died, Urban Ventures and White Construction bought it from his estate. They ended up buying it from his two grown daughters who lived in New York City. “They wanted nothing to do with it,” Powers said.