Can't Make Your Project Pencil? Turn To The City
Getting projects funded today is no mean feat, but working with the city and state can help ease the process and get developments across that financial finish line, industry experts said at Bisnow’s Hospitality and Mixed-Use Summit Tuesday.
“If you’re not meeting with a council member, your project is going to be more costly. It’s going to take much longer than if you give that process the level of curiosity,” Darrell Watson, who represents District 9 on the Denver City Council, said onstage at the McNichols Building in Civic Center Park.
Watson is also vice chair of the Metro Area County Commissioners. He said the regulatory environment of city and state governments can contribute to a project’s success. At the same time, an unpredictable city government or planning department can undermine those efforts, he said, especially given the current challenging environment for commercial real estate.
“Building the capital stack for development in Denver is difficult,” Watson told Bisnow in an interview after his panel. “We’re seeing vacancies throughout downtown. We’re seeing difficulties with a slowing economy, which is not something that’s just Denver’s situation that we’re facing — it’s across the country.”
However, Denver has its own regulatory issues, and getting new projects going to maintain a vibrant city with a unique character is a two-way street, Watson added.
“We need to be about a culture change when it comes to planning, when it comes to our development, when it comes to our growth,” he said. “Our city planning department, with our new leadership and the new administration, has to look at ways to make it easier to do business.”
Urban Villages CEO and founder Grant McCargo said public policy and government can help bring people back into cities following the difficult pandemic years. Denver has a lot of obsolete buildings, especially in the office sector, a problem that needs to be addressed as soon as possible.
“We can’t take 10 years to do it,” he said. “We need to do it now.”
But doing it now is tricky. High interest rates are making it difficult to turn a profit on construction, if you can even get a loan to begin.
“For developers here in Denver and across the country, you need to be nimble,” Formativ CEO Sean Campbell said. “As Darrell said, you need to be collaborative with your city. In some cases, they bring the financing tools and other elements that you can bring into your project to make them go.”
The public realm does ask for something in return.
“Here’s what cities need from you: We need ideas, we need partnership,” National Western Center Authority CEO Brad Buchanan said. “That means public-private partnerships. That means, show up!”
It isn’t all about financing. Panelists stressed the importance of going hyperlocal in development to maintain Denver’s unique character. That stretches from the design and tenant mix — for example, finding unique local retailers instead of chains — to the construction team.
“The neighborhood context and the people who live in the neighborhood are key to the success of any project,” said Tobias Strohe, a partner at JNS Architecture + Interior Design.
Strohe emphasized the importance of “drilling down into the heart” of a neighborhood and understanding its culture.
“People love these towns for a reason, and they have their own architectural character and context,” East West Partners Chief Financial Officer Jay Lambiotte said.
Lambiotte said East West focuses on hiring not only the right design professionals for a project but also people who have a personal interest in the project site.
“We’re hyperlocal,” he said. “Our teams live in our markets and will never go into a place to build a project and then leave. So we’re very, very committed to the communities, invested in the communities. Our folks care just as much as any other local about the character of our project.”
