Colorado Real Estate Journal -
George Thorn, principal of Mile High Development, and Koelbel and Co. recently broke ground on their second affordable senior housing development near a lightrail station in Denver. The $13.5 million University Station project follows the success the two longtime developers had with a similar property at 5307 E. Yale Ave., two light-rail stops away. Koelbel is headed by Buz Koelbel and his son, Carl. Thorn’s involvement with the most recent development far outdates the Feb. 26 groundbreaking for the 60-unit, six-story building on the 24,000-square-foot vacant property adjacent to the University Station light-rail stop near Interstate 25 and University Boulevard. It previously was owned by the city and county of Denver and the Regional Transportation District. Thorn has long had his eye on the property. “I’ve been working on and off on developing this site for more than 10 years,” Thorn said. In 2000, he planned a 14-story, 350-bed building on the site to serve graduate students at the nearby University of Denver. “I got sidetracked on other developments and it never was built,” recalled Thorn. In 2007, he began talking with the Regional Transportation District about developing land next to its 545-space parking garage at the site. Mile High Development, acting as an agent for the city and RTD, rezoned the parcel to RMU-30 from R-3. The new zoning allowed a reduction in parking, among other things. But the rezoning didn’t give a green light to the development, as initially expected. “We discovered that RTD’s enabling legislation did not allow the joint development of residential units on its sites,” he said. “So it was put on hold,” while Thorn worked with RTD and the Legislature to change the rules. In September 2010, RTD amended its strategic plan for developments along transit-oriented stations, such as the one at University Station. The RTD noted that there was a new federal emphasis on livability near light-rail stations and that the RTD should be more focused on creating TOD communities. The RTD said in the resolution that it “strongly supports affordable housing development in close proximity to RTD transit services.” That year, the Legislature also adopted House Bill 1143, which made it easier for private developers to develop land around its stations. The legislation allowed RTD to be more flexible as far as parking and transferring its land to the private sector for development and allowed residential developments on its land. “There was no resistance or opposition to the changes,” Thorn said. At the $13.5 million University Station, the development team will lease 50 parking spaces from RTD in the existing RTD garage. “There are 545 space in the garage, but it has been under parked since it opened more than five years ago,” Thorn said. Because of its proximity to downtown Denver, it doesn’t make a lot of sense for motorists coming from the south to park there and hop on the light rail, he said. “They’ll just keep driving to downtown, if they have already driven that far,” Thorn said. Most motorists coming from the south won’t go farther than Colorado Center at I-25 and South Colorado Boulevard to catch light rail, he said. “That parking lot basically is never more than 70 percent filled, so our long-term lease for 50 spaces won’t have any affect on them,” he said. “In addition, we will have another 20 spaces in our building,” Thorn said. He said what typically happens at TOD projects such as this oneis the longer people live there, the more comfortable they become with taking light rail, and residents find they do not need a car at all. Units in University Station will range from about 650 square feet to 950 sf and it will be a mix of one- and two-bedroom units, Thorn said. The entire building will have 80,000 sf, which equates to a density of 109 units per acre and a floor area ratio of 3.3:1. “It is an age-restricted development, so the minimum age is 55, but we think the average age is going to be 70,” he said. Unit rents are based on people making 30 percent to 60 percent of the area median income. He knows demand will far outstrip the supply, based on experience with the 50-unit Apartments at Yale Station, two stops away along T-Rex. “We leased up the entire Yale Station development within five weeks and we currently have a waiting list of more than 150 people,” Thorn said. “We expect that we are going to basically be leasing all of our units at University Station to people who were not able to get into the Yale development,” he said. Both developments are being financed with low-income housing tax credits from the Colorado Housing and Finance Authority. Key Bank is providing construction financing. RBC Capital Markets is the tax-credit investor, as it was with Yale Station. “CHFA was really key to this development,” Thorn said. “The tax credit program was created during the Reagan Administration as part of the tax reform act of 1986 and has been a very successful program for more than 25 years.” Mile High and Koelbel will not seek a LEED certification for University Station, but it will be very energy-efficient and sustainable, Thorn said. He said it will meet, or exceed, Enterprise Green Community standards, for example. “Of course, we get green points for being at a light-rail station,” Thorn said. Thorn said he doesn’t think University Station will be the last venture he and Koelbel Co. do together. “I’m out looking for other opportunities,” Thorn said.