Denver Mayoral Candidates Say Adaptive Reuse Could Revive The City

As Denver’s mayoral race heats up ahead of the April 4 election, the viability of downtown Denver is top of mind for voters and candidates alike.

Mayoral candidates Bisnow interviewed said Denver’s next leader needs to have a plan to balance preserving the city’s historic buildings while increasing the supply of affordable housing and commercial space for future uses. One solution could include converting unused downtown office space into event centers and revamping old churches into apartments and townhomes. 

However, some candidates said there are still regulatory burdens, such as Denver’s strict building code and backlogged permit review process, that need to be addressed before adaptive reuse projects can flourish in the Mile High City. 

“We want to do everything we can to attract more people to work, live and play downtown,” mayoral candidate Mike Johnston, a former state senator, told Bisnow in an interview. “And so to the extent that we can convert existing commercial space to residential, I think there is a great opportunity there.” 

Adaptive reuse became en vogue over the last few years as rising interest rates made it more expensive for developers to borrow money and supply chain bottlenecks pushed them to find creative ways to deliver new buildings. 

There were more than 28,000 apartments nationwide that were converted from unused offices in 2022, a more than 25% climb from 2021, according to a study by RentCafe. That is an even bigger jump from the 2010s, when roughly 9,800 units were created a year from property conversions, RentCafe data shows. 

The total number of converted housing units is expected to rise in 2023 to more than 77,000 as cities across the country grapple with high commercial vacancy rates, according to the report. High office vacancy rates are a primary driver of repurposing buildings — 40% of all adaptive reuse projects in 2022 occurred in old office spaces, while another 37% came from hotels, factories and warehouses.

Denver’s office vacancy rate stands at around 18.3%, the seventh-highest rate among Western cities, according to CommercialEdge’s February 2023 national office survey. Vacancy has increased by more than 2.7 percentage points year-over-year and more than 3.7 percentage points over the past two years. 

Markers Line President Tim Foster, a contractor who focuses on office buildings in downtown Denver, said adaptive reuse could be the key to reviving the submarket after three years of low foot traffic caused by the pandemic. It can also help overcome some of the struggles that many builders are facing from high labor and material costs. 

“We really need the next mayor of Denver to push politics to the side and lean into adaptive reuse,” Foster said. 

To mayoral candidate Kelly Brough, the former CEO of the Denver Metro Chamber of Commerce, Denver’s stubbornly elevated vacancy rate means that the city’s next mayor will need to find a way to forge partnerships with developers to make underutilized commercial space productive again. 

“We’ve had tremendous success with reuse projects already,” Brough told Bisnow. “And that effort is critical for our future.” 

The 94K SF REI Co-Op building on Platte Street in downtown was converted from an old Tramway building into a retail destination in 2000. South of downtown in the Harvey Park neighborhood, developers finished turning an old church school dormitory known as Pancratia Hall at the Loretto Heights campus into 74 affordable housing units in 2022. 

Jim Walsh, a history professor at the University of Colorado Denver and another mayoral candidate, told Bisnow that these projects are “important to slowing urban sprawl and preserving Denver’s cultural heritage.” He also said it will be important to ensure that converted spaces are “made affordable to directly address the housing crisis.”

But some candidates said there are hurdles Denver needs to clear before it can go on an adaptive reuse spree. One is the permitting backlog that Community Planning and Development is facing. Permits for large residential development projects are taking an average of 14 weeks to review while commercial projects are taking an average of 12 weeks, according to CPD’s website. This slows down the construction process and can impede the expansion of local businesses. 

Johnston said resolving the permitting process issues would be one of his main focuses as mayor. One solution he proposed is to have adaptive reuse projects skip the site development plan phase altogether because the buildings eyed for conversion already exist. Under this plan, conversion projects would be allowed to jump straight to the building permit stage, which is where developers submit their architectural drawings and building plans to the city for approval. 

“We can’t afford to wait 18 months for all the approvals to come through,” Johnston said. “We need to do it as quickly as possible, and that means expediting the process and finding ways to make it more affordable for people to do these kinds of conversions.”

Mayoral candidate Debbie Ortega, a term-limited at large representative on the Denver City Council, agreed that Denver’s permitting issues need to be resolved before it can undertake significant adaptive reuse projects and increase the city’s stock of affordable homes. She added Denver will also need to look at its building and fire codes to make sure they meet the needs of developers who will convert the unused buildings and keep new building occupants safe. Ortega pointed to two extended-stay motels on the north side of town that Denver converted into 24-hour shelters for people experiencing homelessness during the pandemic. 

Ortega said Denver also needs to look at expanding conversions in all of its commercial corridors, including the Golden Triangle. 

“The last thing we want is for Denver to become a ghost town,” Ortega told Bisnow.