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BROOMFIELD — Once upon a time — actually, just two or three years ago — the offices of local planning departments were lonely places.
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The 2008 financial crash had taken its toll. Developers were hit hard as construction loans dried up. Ambitious plans were shelved or dropped completely, and even promising developments had entered “development hell,” to borrow the phrase Hollywood uses for good scripts that can’t get filmed.
The effect was felt by bankers, developers, construction companies and architects.
Those days, at least in certain cities and for certain projects, appear to be over. Banks are lending, investors and developers are looking to get a jump on the awakening market and construction crews once again are getting to work.
Broomfield is among the cities experiencing the rebound. Since the start of 2011, 34 projects have been started or completed. According to the city planning department’s calculations, the estimated value of those projects is $417.4 million.
While many of the projects are under way, others are piling up in the city’s planning department.
The office is led by Broomfield’s community development director, Dave Shinneman. Given Broomfield’s planning and building process, virtually all construction plans for commercial buildings in the city go through his office.
When going over planning maps last month, Shinneman joked that it’s getting hard for his office to keep track.
“Once things get going,” he said, “it really is like watching dominoes.”
The biggest driver of new construction is the U.S. Highway 36 corridor’s appetite for apartments. According to information supplied by the planning department, seven apartment projects that would build 2,098 units have been approved or are under construction.
New projects are sprouting up in the Arista, Interlocken and Broomfield Business Park developments, and all are in sight of the highway.
Much of the work is taking place at Arista, the transit-oriented mixed-use development near the southeast corner of U.S. 36 and Wadsworth Parkway. In the development, Denver-based Smith Jones Partners is nearing completion of the 272-unit Arista Uptown, while Chicago-based AMLI Residential is about to begin the 168-unit second phase of the AMLI at Arista. Davis Development has submitted plans for a 240-unit project in the development, and KB Home is building 62 duplex units.
The construction has brought new life to Arista, a 189-acre development best known as the home of the 1stBank Center arena. The development was planned and started in the mid-2000s, and the recession stalled progress.
But in recent years, it feels as though it has turned a corner, said Tim Wiens, its developer.
“We’re very pleased with the activity that has been going on at Arista and continues to go on,” Wiens said.
Three factors seem to be accounting for Arista’s success, Wiens said. Companies such as AMLI are building the right kind of product at a time when demand from renters has never been higher.
“The activity probably is a good reflection of the location itself and the overall lifestyle of that development and the type of development,” Wiens said. “It (also) speaks to the market. Vacancies remain low, and rates for premium properties are continuing to modestly increase.”
There also seems to be a “paradigm shift” in the residential real estate world, Wiens said. Fewer people want (or can afford) to buy, and renters aren’t looking to buy their first homes as soon as they can.
“I think it will continue into the foreseeable future,” he said.
AMLI isn’t the only developer with national reach to invest big in Broomfield. Wood Partners, Carmel Partners and the Camden Property Trust have projects going up.
Denver-based developers Etkin Johnson Group have known the corridor’s potential for years and have many investments in Broomfield and Louisville. The company is starting its first residential project, the 374-unit Retreat at the Flatirons, in the Via Varra neighborhood.
The Retreat is the residential piece of the 74-acre Broomfield Business Center mixed-use development. Etkin Johnson has planned the project for several years, and the company thinks its timing might be better than its competitors, said Aaron Johnson, the company’s vice president for investments.
“Being among the first to come out of the ground is important,” Johnson said, “and with that we’ll be able to carve out a nice bit of the market.”
Office, retail lagging
While apartment construction is booming, developers do not seem to be as interested in developing office or retail space.
Only one major office building, the 193,000-square-foot EOS at Interlocken, has been built since 2011, and the Planning Department is not aware of any other active projects that have been submitted for review.
EOS was built on speculation by Hines, a Houston-based development company. As of now, it is vacant. According to data from the Broomfield Economic Development Corp., the vacancy rate for office space in the city as almost 17 percent.
Wiens said plans for a proposed 92,000-square-foot office building in Arista are on hold. The same is true for the commercial parts of the Broomfield Business Center, Johnson said.
The market for commercial space seems limited because of trepidation about “real and perceived” weaknesses in the economy, Wiens said. Investors in office projects appear to be waiting until the market “regains its stride, or even recognizes it has a stride.”
Retail also is going slowly, with the last major building project being the Broomfield Crossing Walmart on 120th Avenue. Work on the Walmart and the surrounding shopping center largely wrapped up in 2010.
A 13.5 percent vacancy rate for retail could explain the lack of new construction. The area around FlatIron Crossing has been hit hardest. While the mall itself appears to be healthy and celebrated the opening of an H&M last year, the shopping centers around the mall are struggling.
That could present a quandary for Broomfield in coming years as the city tries to help revitalize FlatIron Crossing while other retail centers grow, Shinneman said. Among the developments awaiting new retail is Arista, the northern half of which has been slated for retail.
Room for more
While development along U.S. 36 has been the historic driver of Broomfield’s economy, the city’s vision for the future is moving north, along Interstate 25, Shinneman said.
About a half-dozen developers have submitted planned unit plans for developments in the area.
The key development in that area is 935-acre North Park, which is owned by Loveland-based McWhinney. If built out according to the current vision, North Park could have 17 million square feet of office, retail and research space, according to McWhinney vice president Jay Hardy.
“We think North Park could really be like the Denver Tech Center North, in terms of looking 20 years from now,” Hardy said.
University of Colorado Health recently announced it had purchased 66 acres in North Park. The hospital system is only starting to develop a long-term vision for the land, but both Hardy and Shinneman said it is possible a medical center could become the engine behind North Park’s growth.
McWhinney continues to pursue leads for projects in North Park, and the company could be announcing new projects in upcoming months, Hardy said.