Denver city government took a big step Tuesday toward turning the former downtown headquarters of The Denver Post into a courthouse when the City Council approved an $88.5 million purchase agreement for the building at 101 W. Colfax Ave.
A city master plan projects it will need an additional 280,000 square feet of space for the city and county’s courts system by 2040. The former Denver Post building — which rises 11 stories and has roughly 306,000 square feet — has been identified as an ideal fit for that need by city real estate officials.
The office building, at the northwest corner of Colfax and Broadway, is a short walk from the City and County Building, already home to non-criminal courts, and the Denver Justice Center. Since city agencies already sublease space in the building, it’s tied into the city’s computer network. It also has a 635-space parking structure, among other features, according to a recent staff presentation.
The city’s deal is with building owner Kayan LLC, an affiliate created by American Properties. But the purchase is not final, despite the council’s 9-4 vote.
Council members including Kevin Flynn, who voted yes, noted that the city’s finance and real estate departments must still seek approval of the specifics around their financing of the deal. That would give the council another off-ramp, should it choose to nix the purchase.
City officials plan to issue certificates of participation, a form of debt financing that pledges city assets as collateral and doesn’t require voter approval, to cover the building purchase.
Opponents of the deal, led by Councilwoman Shontel Lewis, questioned Tuesday if there were better deals to be found at a time when downtown office real estate is financially struggling.
Lewis also voiced concerns that the city was investing in future needs for the courts when she felt that money could be better invested in programs and policies that address the root causes of crime.
“I’m unable to reach the conclusion that the taxpayer is getting a good deal for this money,” Lewis said before casting her “no” vote. “Why would we not want to wait at least a few months — since the need for this building doesn’t start until after 2030, the commercial real estate market is becoming buyer-friendly and we could get a better deal on a newer building needing less updates?”
The building was completed in 2006 as a joint headquarters for The Post and the Rocky Mountain News, which shuttered in 2009. Neither newspaper ever owned it. Kayan LLC paid $93.4 million for the building as construction was concluding, property records show.
The Post’s owner has five years remaining on a master lease of the entire building, despite moving the newsroom and other operations to the company’s printing facility in Adams County in 2018.
The company rents space to several subtenants — including the city, which has $44 million in sublease obligations in the building through 2029.
In response to questions Tuesday, Lisa Lumley, the city’s director of real estate, noted that many of the buildings facing financial hardship on the eastern edge of downtown were significantly older than 101 W. Colfax. The city also would have to negotiate with multiple tenants if it bought one of those structures.
If the city’s purchase is finalized, then the rent it now pays to the newspaper’s owner, through DP Media Network LLC, would come back to the city and could be used to pay for the financing. She projected the unorthodox arrangement would be revenue-neutral for the city’s general fund through 2029, or even provide some surplus money.
Lumley expected the financing arrangements to land in the council for approval next month. If the council approves the financing, “the intent would be that we would close on this (purchase) in the last week of March or the first week of April,” she said.
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Denver city government took a big step Tuesday toward turning the former downtown headquarters of The Denver Post into a courthouse when the City Council approved an $88.5 million purchase agreement for the building at 101 W. Colfax Ave.
A city master plan projects it will need an additional 280,000 square feet of space for the city and county’s courts system by 2040. The former Denver Post building — which rises 11 stories and has roughly 306,000 square feet — has been identified as an ideal fit for that need by city real estate officials.
The office building, at the northwest corner of Colfax and Broadway, is a short walk from the City and County Building, already home to non-criminal courts, and the Denver Justice Center. Since city agencies already sublease space in the building, it’s tied into the city’s computer network. It also has a 635-space parking structure, among other features, according to a recent staff presentation.
The city’s deal is with building owner Kayan LLC, an affiliate created by American Properties. But the purchase is not final, despite the council’s 9-4 vote.
Council members including Kevin Flynn, who voted yes, noted that the city’s finance and real estate departments must still seek approval of the specifics around their financing of the deal. That would give the council another off-ramp, should it choose to nix the purchase.
City officials plan to issue certificates of participation, a form of debt financing that pledges city assets as collateral and doesn’t require voter approval, to cover the building purchase.
Opponents of the deal, led by Councilwoman Shontel Lewis, questioned Tuesday if there were better deals to be found at a time when downtown office real estate is financially struggling.
Lewis also voiced concerns that the city was investing in future needs for the courts when she felt that money could be better invested in programs and policies that address the root causes of crime.
“I’m unable to reach the conclusion that the taxpayer is getting a good deal for this money,” Lewis said before casting her “no” vote. “Why would we not want to wait at least a few months — since the need for this building doesn’t start until after 2030, the commercial real estate market is becoming buyer-friendly and we could get a better deal on a newer building needing less updates?”
The building was completed in 2006 as a joint headquarters for The Post and the Rocky Mountain News, which shuttered in 2009. Neither newspaper ever owned it. Kayan LLC paid $93.4 million for the building as construction was concluding, property records show.
The Post’s owner has five years remaining on a master lease of the entire building, despite moving the newsroom and other operations to the company’s printing facility in Adams County in 2018.
The company rents space to several subtenants — including the city, which has $44 million in sublease obligations in the building through 2029.
In response to questions Tuesday, Lisa Lumley, the city’s director of real estate, noted that many of the buildings facing financial hardship on the eastern edge of downtown were significantly older than 101 W. Colfax. The city also would have to negotiate with multiple tenants if it bought one of those structures.
If the city’s purchase is finalized, then the rent it now pays to the newspaper’s owner, through DP Media Network LLC, would come back to the city and could be used to pay for the financing. She projected the unorthodox arrangement would be revenue-neutral for the city’s general fund through 2029, or even provide some surplus money.
Lumley expected the financing arrangements to land in the council for approval next month. If the council approves the financing, “the intent would be that we would close on this (purchase) in the last week of March or the first week of April,” she said.
Stay up-to-date with Colorado Politics by signing up for our weekly newsletter, The Spot.