For Debbie Karber, moving to downtown Colorado Springs is an exciting new journey.
Karber and her husband, Curt, are relocating in April to an apartment at 418 S. Tejon St. in the newly completed Casa Mundi complex — the most recent of several luxury apartment buildings to open in downtown Colorado Springs.
“When it was time to look for somewhere to live, we were just really drawn to an adventure, and it felt like living downtown could be that,” she said. “We like the energy, and we want to ride bikes and experience downtown living.”
Curt, a partner at McMahan & Karber, CPAs, can walk just a few blocks to his office.
“He’s never been able to walk to work in his life,” Debbie said.
The Karbers, who are empty nesters, are close to dozens of restaurants, coffee shops and boutiques.
“We’re all about local,” Debbie said. “I love the little mom-and-pops — the people that live here, invest here and believe in this city.”
The Karbers also are excited about the opening of the U.S. Olympic & Paralympic Museum, and they are looking forward to walking and biking the trails through Monument Valley Park.
“We plan to do a lot of biking this summer,” she said.
The Karbers aren’t planning to make Casa Mundi their permanent home. They will be living there until construction on their new home is completed in about eight months.
But they represent people — from young professionals to retirees — who want the kind of urban lifestyle that hasn’t been available in Colorado Springs and who are driving the demand for residential units in the downtown area.
For the past 10-15 years “we have seen a national trend of people wanting to move back to the urban core, looking for a simpler lifestyle, where you have a mix of uses,” said Darsey Nicklasson, developer of the 27-unit Casa Mundi, which had its grand opening March 5.
“Colorado Springs is just now catching up,” she said.
APARTMENT BUILDING BOOM
Nicklasson launched the downtown apartment building boom in 2016, when she and partner Kathy Loo developed and opened Blue Dot Place, a 33-unit apartment building at 412 S. Nevada Ave. It was the first new multifamily residential building to be built downtown since the 1960s.
22 Spruce, a 46-unit project developed by Goodwin Knight, opened in 2018 at Bijou and Spruce streets, and 333 ECO, a 169-unit building at Colorado and Wahsatch avenues developed by Nor’wood Development Group and Griffis/Blessing, started leasing in 2019.
More projects are in the works.
“Years and years of pent-up demand are starting to be fulfilled,” said Susan Edmondson, president and CEO of the Downtown Partnership. “There are many people in our community, and people moving to the community, who want that walkable, urban lifestyle, and developers are moving to make that happen.”
As a result, “downtown is exceeding the goal that was set a handful of years ago to have 1,000 new units by 2020,” Edmondson said. “We will definitely exceed the goal to have 2,000 units by 2025.”
So far, the new properties have commanded above-average rents.
There are two reasons for that, Edmondson said: underserved demand and the high costs of development.
“The way the market works is that you’re first going to reach that pent-up demand before the market evens out,” she said. “As more product comes online, things will moderate.”
At the moment, luxury downtown apartments are in high demand, and there are plenty of people who have the desire and capacity for a higher-end product.
In addition, the cost to develop downtown is significantly higher than what it costs to build a typical suburban garden apartment development.
The land on which Casa Mundi sits was expensive, Nicklasson said, and the project took two years to build.
“You have to pay for parking for contractors, and there’s no place to drop or store materials,” she said. “It all adds up. And in order to pay the bank back for the loan I took out to build it, and to make a return on investment for our partners — that’s how we set rents.”
Rents at Casa Mundi start at $1,615 a month for a 600-square-foot, one-bedroom unit and go up to $2,615 for a 1,124-square-foot, two-bedroom, two-bath unit on the building’s top floor.
For those prices, tenants get 12- to 15-foot ceilings, mountain or city views from their balconies and amenities like granite countertops, stainless steel appliances and custom tile work in the kitchens.
The Downtown Development Authority prioritized residential projects and used tax increment financing to help offset some of the costs and get the early projects off the ground, Edmondson said.
The city also helped by streamlining construction and permitting processes.
“It took everyone coming together to make these projects happen,” she said, “but it starts with a developer willing to take that risk.”
BUILDING A NEIGHBORHOOD
Nicklasson and her husband came to Colorado Springs from the District of Columbia in 2005, where they lived in the core of the city and loved it.
“We loved walking to work and to restaurants and not having to use cars,” she said. “When we moved here, we wanted a similar lifestyle.”
They found a house near downtown.
“I always wanted to make things happen in my neighborhood,” she said. She formed DHN Planning & Development, joined the Downtown Partnership and started to think about what she could build.
“Kathy Loo had similar desires for downtown,” Nicklasson said. “We said, ‘Somebody has to take the first punch. If they’re doing it in Wichita, there’s no reason why it can’t happen here.’”
Nicklasson and Loo did market research, consulted with mentor and acquired the land to build Blue Dot Place, hiring architects and engineers for their project.
When it was completed, the development took off right away.
“We leased out Blue Dot in four months,” Nicklasson said. “It would have been less, but it was my first, and I had a lot to learn.”
Loyal Coffee moved in next door just after the development opened.
“That was planned,” Nicklasson said. “We knew we needed something to draw people down” to the evolving neighborhood.
While they were acquiring the land for Blue Dot, one of Nicklasson’s mentors suggested that she make friends with neighbors on their block.
They paid a visit to real estate brokers Kevin Butcher and Sam Cameron and said they were going to make a mess of their alleyway.
“They said, ‘When you’re done, we have a lot on Tejon,’ Nicklasson said. “So we’ve been talking about Casa Mundi since before we started construction on Blue Dot.”
During their forays to meet their neighbors, Nicklasson and Loo started inviting people to meet for happy hours.
“We talked about our businesses and came up with the idea of naming our neighborhood,” Nicklasson said. “Somebody threw out the name New South End. It stuck.”
MORE PROJECTS TO RISE
Nor’wood’s 330 ECO Apartments also was leased out quickly to tenants from Millennials to retirees, confirming that people want to live downtown, Nor’wood Vice President Jeff Finn said.
The developer’s 178-unit The Mae on Cascade is under construction at Cascade Avenue and Rio Grande Street and scheduled to open this summer.
The company is working on design and development of a complex adjacent to America the Beautiful Park. With the working name Parkside, it will be located near the west landing of the bridge to the U.S. Olympic & Paralympic Museum.
“That one will have 187 units, and 78 will be for sale — a new offering for downtown,” Finn said.
Nor’wood also plans to break ground this summer on a 154-unit complex a block south of ECO at the northwest corner of Vermijo Avenue and Wahsatch Street.
The project, called 322 Vermijo Apartments, “will be a little bit different in that the price point is attainable,” Finn said. Nor’wood is using cost-efficient strategies such as standardized kitchens and a rooftop hot tub (rather than a pool like the one at ECO) to control costs and bring rents down to a point below ECO and The Mae.
The goal is to provide housing for workers who make 70 to 100 percent of the area median income.
Another potential workforce housing project has been proposed by the YMCA of the Pikes Peak Region, which plans to replace the Downtown Y at Nevada Avenue and Bijou Street with a new recreation and wellness center.
The building would be topped with 100 to 200 apartments, some of which would be priced for middle-income tenants.
The YMCA and partner White Lotus Group of Omaha, Nebraska, announced the plan in December 2019.
Nor’wood and Weidner Apartment Homes are both big players in southwest downtown, where two of the four City for Champions projects are located. Weidner, one of the drivers of the Downtown Stadium project, plans to build up to 1,000 apartments in mixed-use buildings near the stadium.
SERVING RESIDENTS’ NEEDS
All of these new downtown residents will demand more amenities to support their urban lifestyles.
One thing that’s missing, Finn said, is a grocery store.
“Having fresh, attainable food is really important and something we should be focused on,” he said.
That need will start to be met this spring, when Aubrey Day and Stacy Poore open the Bread & Butter Neighborhood Market at 802 S. Nevada Ave.
Finn also would like to see the city continue to add unique restaurant options.
“When I go to other cities, I’m constantly seeing new concepts and new types of restaurants,” he said.
A high percentage of ECO residents have pets, he said. “It would be great to see dedicated outdoor spaces for dogs.”
Although there’s a lot of parking at ECO, “we could add more [downtown],” Finn said. “In the nicer months, a lot of our residents are choosing to commute by bike. Continued investment into bike infrastructure is something our residents want and would continue to use.”
Most importantly, “we need as a community to be attracting new companies to downtown … and have downtown be a competitive and viable option for national headquarters,” he said. “That will continue to attract new residents.”
Edmondson said she expects to see more fitness centers, workout studios and salons locating downtown.
“We’d love to see a drug store, but we probably need more residents before that would work financially,” she said.
“Residents are essential to the health of our existing restaurants and businesses,” Edmondson said. “The best thing we could do for our shops is having more residents living near them.”