Colorado Real Estate Journal - May 7, 2014

MVG bringing Sprouts to Wheatridge site at West 38th & Kipling

by John Rebchook

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Early next year, the first Sprouts Farmers Market in Wheat Ridge is scheduled to open.

Denver-based MVG Development plans the 27,000-squarefoot Sprouts on a 6.3-acre site at West 38th Avenue and Kipling Street.

The $24 million redevelopment also will include a 64-unit MorningStar Senior Living center, a new Starbucks and one remaining retail pad.

Landing a Sprouts is a big deal, said Steve Art, the city’s economic development director. “I think it brings legitimacy to the city for our economic development efforts to bring that kind of healthy lifestyle grocer to an area where citizens have been frustrated by the lack of healthy choices,” he said.

But don’t call the area a “food desert,” a popular way of describing an area with few healthy food choices at reasonable prices.

“I wouldn't call it a food desert because there is a nearby King Soopers,” Art said.

“I do think this area, though, is somewhat underserved for healthy food choices at reasonable prices,” Art said.

The new store is scheduled to open in January. Fitch is the design architect for the Sprouts building.

Greg Moran, senior vice president of development at MVG, who has more than 25 years of experience in real estate, said the redevelopment is relatively small compared to large-scale retail projects he used to tackle.
Moran and Art first met at the International Council of Shopping Centers convention in Las Vegas in 2011.
“Steve Art was pretty aggressively promoting economic development sites in Wheat Ridge, and I was looking for a site for my client, Sprouts, to take some of the pressure off its store in West Highland,” along West 38th Avenue and Wolff Street in Denver, 3.21 miles to the east of the Kipling site.
Art put Moran in touch with a company looking to prepare a site at West 44th Avenue and Wadsworth Boulevard, but that deal didn’t pan out.
“What I really wanted to do was to learn about Wheat Ridge and development opportunities there, and so Steve and I kept in touch,” Moran said.

‘The site itself
is elevated, so
it is highly
visible. I also
think it is an
underserved
market for a
natural grocer.’

– Greg Moran,
MVG Development

The Kipling location is a great site, Moran said. “It is a signaled intersection, there is a nearby community recreation center and it is across the street from the new Discovery Park,” Moran said.
It also is just to the west of the Exempla Lutheran Medical Center and it is a long 38th, which is undergoing its own Renaissance, he noted.

“The site itself is elevated, so it is highly visible,” Moran said.

“You can look down 38th and it just feels like the city is really doing a lot with streetscapes and beautification programs to make it a very nice corridor.

“I also think it is an underserved market for a natural grocer,” he said. “The nearest Whole Foods is at Alameda and Wadsworth (in Belmar) and that is quite a ways to the south.” Reportedly, the West Highland Sprouts, which formerly was a Sunflower Market, is the most successful in the chain.

Currently, there are 23 Sprouts stores in Colorado, although another one is scheduled to open in June at 5001 S. Broadway in Englewood.

Last month, the city of Wheat Ridge approved a $3 million finance package for the redevelopment.

As much as $1 million will come from Wheat Ridge’s general fund and the remainder will be in the form of a Wheat Ridge Urban Renewal Authority loan, which will be paid back through tax increment financing.

It is projected to be a good investment.

“Over a 10-year period, it should throw off $1.91 million in additional property tax revenues and an additional $5.069 million, so a total of about $7 million,” Art said.

While some people always disapprove of TIF deals, “If not for the assistance from the city to help us with that $3 million, this project would not happen,” Moran said.

He noted it will be spending a great deal of money upfront to prepare the site.

“We will be putting in new sidewalks, road improvements, better drainage and other beautification efforts,” Moran said.

“All of those things are really public improvements that will benefit the city,” he said.

The financing, expected to be approved by the council this month, has a 10-year term and a 3.61 percent interest rate, Art said.

In addition to the Sprouts, MVG is selling the northwest corner of the site to MorningStar.

Then, MVG will form a joint venture with MorningStar to develop the new facility, Moran said.

“We are also talking to Starbucks to build them a new building on the site with a drive-thru window,” Moran said.

“After that, we have one small pad left, of about a half acre in size,” he said.

Given the location and the improving demographics along the corridor, he doesn’t expect any trouble in finding a tenant for the site.

Other News

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Eric Carlson leased 1,360 sf for a tattoo studio at the Applewood Grove Shopping Center at 1921 Youngfield St. in Golden. The landlord is Fortuna Capital LLC. Gene Stone of Antonoff & Co. Brokerage Inc. was the listing agent.

Thomas Ferro leased 1,180 sf at Peoria Street Plaza at 4621 Peoria St. in Denver. Gene Stone of Antonoff & Co. Brokerage was the listing agent.

Yu Qiang Chen leased 1,162 sf for a restaurant at Palizzi Marketplace at 450 E. Bromley Lane in Brighton. Jeffrey Hirschfeld of Antonoff & Co. Brokerage was the listing broker.

Seventy300 LLC paid $415,000, or $171,191 per sf, for a 2,414-sf retail building on a 13,253-sf lot at 7300 W. 38th Ave. in Wheat Ridge. The buyer was represented by John V. Propp and Joshua K. Cohen of the John Propp Commercial Group.
The new owners plan to either retrofit the building with a drive thru or scrape the existing building and replace it with a new building with a drive-thru. The site is in the area branded as the Ridge at 38 by the city of Wheat Ridge.