Downtown nightclub owners Sam and Kathy Guadagnoli have backed out of plans to expand the Gasoline Alley bar into a vacant next-door building at 26 N. Tejon St.

The couple was eyeing the vacant building, situated between Gasoline Alley and Blondies/Red Martini at 22 N. Tejon St., an were under contract to purchase it. They planned to expand Gasoline Alley into the space along with its liquor license and add rooftop dining and a kitchen at the front of the space.

The sale fell through about a week ago, according to Charles D’Alessio, a broker with Synergy Home Realty who represents the building owners.

“The word I heard was that Sam got tired of dealing with the process and there were just going to be too many hoops to jump through to make it worth it,” D’Alessio said.

The Guadagnolis had applied for a conditional use permit from the Downtown Review Board, an arm of the city’s planning commission, to extend the Gasoline Alley tavern license into the new building. The issue was scheduled for a hearing today. They withdrew their application last week, said Colorado Springs city planner Ryan Tefertiller.

The form-based code downtown is permissive of almost any use, but requires conditional use permits for bars along with auto repair shops, some human services like homeless shelters or detox centers and sexually-oriented business like adult bookstores.

- Advertisement -

Some neighbors, primarily people who own nearby lofts, wrote letters to the downtown review board, complaining about the predominance of bars on the block of Tejon Street between Pikes Peak Avenue and Kiowa Street. They asked for the board to deny the application.

“There are limited potential uses for the space given its surrounding uses and its size,” Tefertiller said.

D’Alessio said he took over the listing for 26 N. Tejon St., which is about 3,700-square feet, a week ago.

“I’ve had several inquiries since I’ve had it on the market,” D’Alessio said.

He’s even shown the space a few times. Ideas that potential buyers have include turning the space into a retail lending agency, a medical marijuana dispensary and a 1980s-themed arcade and bar. The bar would have to get the same conditional use permit the Guadagnolis gave up on.

Medical marijuana operations are considered permitted uses after a revision to the downtown form-based code last spring, Tefertiller said. A building owner would not have to get a conditional use permit for a dispensary.

“My opinion is that it would make a great little hamburger joint,” D’Alessio said.

He envisions someone turning the space into a restaurant that also serves late at night to bar patrons.

The building has been mostly vacant since Zerbe’s Jewelers moved out four years ago. A tattoo parlor occupied the storefront for about a year.

D’Alessio said he hopes he can sell the building, or at least lease it by the end of the summer.

“There’s a lot of potential there,” he said.