The parking lot next to the Sloan’s Lake Medical Center on March 4, 2024. (Thomas Gounley/BusinessDen)
An effort to remake a site at the southeast corner of Sloan’s Lake, in the works for at least six years, could break ground this quarter if city leaders sign off. But the details of the project have changed.
The site along Newton Street between 16th and 17th avenues is currently a parking lot used by the adjacent Sloan’s Lake Medical Center. Denver-based Zocalo Community Development plans to replace it with hundreds of new residential units, many of them income-restricted.
The plans, which Zocalo CEO David Zucker first discussed publicly in 2018, have always called for two residential buildings, as well as a detached parking garage.
The original vision called for one five-story building with about 150 affordable rental units. The second building, a tower topping out at 16 stories, would feature 160 for-sale condominiums.
Zocalo got the necessary rezoning for the project in 2019. But the site has sat unchanged for the last five years.
David Zucker
In an interview last week, Zucker told BusinessDen the project was close to breaking ground in 2021, but the timeline was subsequently affected by a roughly 550 basis point rise in interest rates and a 40 percent jump in construction costs.
“We had to rethink everything after 2020, especially the financing of how to deliver affordable units,” he said.
Zocalo no longer plans high-end condos. The 16-story tower, while still the same size as the original proposal, is set to now feature more — and much smaller — units, all 294 of them rentals. That would be broken down into 269 market-rate and 15 income-restricted apartments, as well as 10 market-rate townhomes. There would also be some ground-floor retail space.
The smaller structure is largely unchanged, set to have 158 income-restricted rental units.
Nine townhomes facing a newly created stretch of Meade Street would be the only thing within the project for sale. They would be priced so as to be affordable to those making the area median income.
A rendering of Zocalo Community Development’s proposed project, looking from the southwest to the northeast. In the forefront is the income-restricted structure, designed by John Gagnon of JG Architects. (Courtesy Zocalo Community Development)
Zucker declined to comment on the decision to nearly eliminate the project’s for-sale component. But in a Feb. 21 meeting before Denver’s Planning Board, Shannon Gifford of the Denver Mayor’s Office attributed the decision in part to disappointing sales at Lakehouse, a condo building four blocks to the west that was completed in 2020.
“The way this project was originally going to be financed, it was that luxury condos would be sold at a level that allowed that project to subsidize the affordable component … And that was predicated on an understanding of the market based on proposed sale prices at Lakehouse, just down the street,” Gifford said. “And those sale prices never materialized.”
Zucker said Zocalo could break ground in June on the smaller income-restricted structure, as well as a 333-stall parking garage, which would serve that building as well as provide spaces for employees and patients going to the adjacent medical center.
He said the tower — which would include 499 parking spaces for residents — could begin construction toward the end of the year.
But Zucker emphasized that timeline is contingent on the Denver City Council approving the project’s urban redevelopment plan, which was drawn up in conjunction with the Denver Urban Renewal Authority.
“Zocalo is ready, if the city is ready, to execute on what I believe is critically important affordable housing, that achieves nearly 40 percent affordable housing project-wide while providing a spectrum of housing from 30 percent AMI through market rate and including nine, perpetually affordable for-sale townhomes at 100 percent AMI,” Zucker said. “I’m not aware of any development doing this in the city today.”
The urban redevelopment plan would award the project up to $9.3 million in tax increment financing, which allows a developer to be reimbursed for certain costs by the additional tax revenue their project creates.
Tracy Huggins
DURA was not involved in Zocalo’s original redevelopment plans. Tracy Huggins, DURA’s executive director, told BusinessDen that the company approached the quasi-governmental organization in 2022 to see if it might get involved.
DURA can get involved when a property is blighted. Huggins said the organization determined the site does meet that definition, because it’s underutilized and suffers from a lack of connectivity — the street grid is disrupted in the area.
“It really is the affordable housing and the cost of the parking garage that will serve the affordable housing that are the key drivers to why we are making this investment,” Huggins said. “If this was just a for-profit undertaking, we wouldn’t be there.”
The city is drafting an updated development agreement with Zocalo. A previous one that the company entered into contained provisions specific to the condos, and is thus no longer applicable given the project changes.
The site of the proposed development is owned by Lowell17 LLC, which Zucker described as a family trust. The trust also owns the Sloan’s Lake Medical Center, which would not be affected by the development plans. The trust and Zocalo would share ownership of the development.
The parking lot next to the Sloan’s Lake Medical Center on March 4, 2024. (Thomas Gounley/BusinessDen)
An effort to remake a site at the southeast corner of Sloan’s Lake, in the works for at least six years, could break ground this quarter if city leaders sign off. But the details of the project have changed.
The site along Newton Street between 16th and 17th avenues is currently a parking lot used by the adjacent Sloan’s Lake Medical Center. Denver-based Zocalo Community Development plans to replace it with hundreds of new residential units, many of them income-restricted.
The plans, which Zocalo CEO David Zucker first discussed publicly in 2018, have always called for two residential buildings, as well as a detached parking garage.
The original vision called for one five-story building with about 150 affordable rental units. The second building, a tower topping out at 16 stories, would feature 160 for-sale condominiums.
Zocalo got the necessary rezoning for the project in 2019. But the site has sat unchanged for the last five years.
David Zucker
In an interview last week, Zucker told BusinessDen the project was close to breaking ground in 2021, but the timeline was subsequently affected by a roughly 550 basis point rise in interest rates and a 40 percent jump in construction costs.
“We had to rethink everything after 2020, especially the financing of how to deliver affordable units,” he said.
Zocalo no longer plans high-end condos. The 16-story tower, while still the same size as the original proposal, is set to now feature more — and much smaller — units, all 294 of them rentals. That would be broken down into 269 market-rate and 15 income-restricted apartments, as well as 10 market-rate townhomes. There would also be some ground-floor retail space.
The smaller structure is largely unchanged, set to have 158 income-restricted rental units.
Nine townhomes facing a newly created stretch of Meade Street would be the only thing within the project for sale. They would be priced so as to be affordable to those making the area median income.
A rendering of Zocalo Community Development’s proposed project, looking from the southwest to the northeast. In the forefront is the income-restricted structure, designed by John Gagnon of JG Architects. (Courtesy Zocalo Community Development)
Zucker declined to comment on the decision to nearly eliminate the project’s for-sale component. But in a Feb. 21 meeting before Denver’s Planning Board, Shannon Gifford of the Denver Mayor’s Office attributed the decision in part to disappointing sales at Lakehouse, a condo building four blocks to the west that was completed in 2020.
“The way this project was originally going to be financed, it was that luxury condos would be sold at a level that allowed that project to subsidize the affordable component … And that was predicated on an understanding of the market based on proposed sale prices at Lakehouse, just down the street,” Gifford said. “And those sale prices never materialized.”
Zucker said Zocalo could break ground in June on the smaller income-restricted structure, as well as a 333-stall parking garage, which would serve that building as well as provide spaces for employees and patients going to the adjacent medical center.
He said the tower — which would include 499 parking spaces for residents — could begin construction toward the end of the year.
But Zucker emphasized that timeline is contingent on the Denver City Council approving the project’s urban redevelopment plan, which was drawn up in conjunction with the Denver Urban Renewal Authority.
“Zocalo is ready, if the city is ready, to execute on what I believe is critically important affordable housing, that achieves nearly 40 percent affordable housing project-wide while providing a spectrum of housing from 30 percent AMI through market rate and including nine, perpetually affordable for-sale townhomes at 100 percent AMI,” Zucker said. “I’m not aware of any development doing this in the city today.”
The urban redevelopment plan would award the project up to $9.3 million in tax increment financing, which allows a developer to be reimbursed for certain costs by the additional tax revenue their project creates.
Tracy Huggins
DURA was not involved in Zocalo’s original redevelopment plans. Tracy Huggins, DURA’s executive director, told BusinessDen that the company approached the quasi-governmental organization in 2022 to see if it might get involved.
DURA can get involved when a property is blighted. Huggins said the organization determined the site does meet that definition, because it’s underutilized and suffers from a lack of connectivity — the street grid is disrupted in the area.
“It really is the affordable housing and the cost of the parking garage that will serve the affordable housing that are the key drivers to why we are making this investment,” Huggins said. “If this was just a for-profit undertaking, we wouldn’t be there.”
The city is drafting an updated development agreement with Zocalo. A previous one that the company entered into contained provisions specific to the condos, and is thus no longer applicable given the project changes.
The site of the proposed development is owned by Lowell17 LLC, which Zucker described as a family trust. The trust also owns the Sloan’s Lake Medical Center, which would not be affected by the development plans. The trust and Zocalo would share ownership of the development.
