City center hanging tough despite lack of major projects
The recession might be coming to an end, but that doesn’t mean that we’ll see new buildings arise from long-vacant downtown parking lots anytime soon.
“I’m not aware of any plans for new construction downtown,” said commercial real estate broker Tim Leigh. “There’s some potential demand — a couple of big law firms may need additional space — but it looks as if downtown will just continue to limp along for the next 24 to 36 months. The only real project on the horizon is the Mining Exchange Building.”
Developer Perry Sanders confirmed that the proposed Mining Exchange Hotel is moving forward.
“We’ve made a formal deal with Sam Guadagnoli to open a comedy club in the ground floor of the Independence Building,” Sanders said. “And other people are coming out of the woodwork to talk to us about salons, about restaurants, all kinds of things.
Given the virtual unavailability of financing for medium-sized commercial projects, how is Sanders funding the deal?
“It’s a difficult environment out there,” he said. “We’ve paid off one $6.5 million loan, and we’re using our own money. But the deal’s on. If I weren’t doing the deal, I’d stop spending my money.”
Confirming earlier statements to the Business Journal, he emphasized that city support in the form of a sales tax sharing agreement is a key component of the project.
“(City officials) have been encouraging,” Sanders said. “And unless everybody I’ve talked to has been lying to me, I think everything will work out. But if the city isn’t willing to step up, it’d be pretty discouraging.”
Ron Butlin, the executive director of the Downtown Partnership, also said that he hasn’t heard of any near-term big projects.
“Unfortunately, real rents downtown just don’t support a new Class A office building,” he said.
But that doesn’t mean that business downtown has come to a standstill.
“There’s the new climbing gym on Nevada, and there’s a new business, Savory Spices, opening on Tejon Street,” Butlin said. “Also, I know that the owners of El Taco Rey may be planning an expanded restaurant on their present site.”
While a new Class A office building might not be in the cards for central Colorado Springs, downtown’s eastern fringe could see some construction in the near future.
“I’d love to see a 20- or 30-unit, three- of four-story residential development,” Butlin said. “And there’s some reason to be optimistic that we’ll see (such a project) in the east downtown area within the next 24 months.”
Leigh also said he believes there might be a market for residential space on the near east side.
“There are some projects that could be revived,” he said, “and the demand might be there at some point.”
Even though the Downtown Partnership’s annual report characterized 2009 as “a year of many economic uncertainties,” it was not without positive developments.
The Downtown Development Authority gave the Cottonwood Artists School and Gallery an “11th-hour hand-up” in the form of a secured loan for the purchase and renovation of a 36,000-square-foot building at 427 E. Colorado Ave.
Including the partnership, four organizations serve downtown’s interests: Community Ventures, which organizes and funds the “Art on the Street” program; the Downtown Development Authority; and the Downtown Business Improvement District.
In aggregate, the four realized revenue of more than $2 million during the last fiscal year, all of which was devoted to maintaining, enhancing, and marketing downtown.
“Downtown Colorado Springs might have been poised to wither and retreat,” said Dick Celeste, president of Colorado College and president of the board of directors of the Downtown Partnership. “But quite the opposite happened. Our leaders, businesses and patrons responded to the cloud of pessimism not just by refusing to pander to it but by choosing, instead, to invest more significantly.”