A hungry Denver restaurant chain is unloading some prime real estate but staying in the 17th Avenue bar scene.
Tavern Hospitality Group will build an expanded Tavern Uptown with an eighth-floor, rooftop deck as part of a planned 315-unit apartment complex at 17 Avenue and Pearl Street. The development will fill a 1.5-acre Uptown plot THG had owned for more than 10 years before selling last month.
It’s a real estate deal CEO Frank Schultz said would have been a no-go if he couldn’t keep his restaurant.
“I’ve had four or five groups ask over time, but I’ve always said we don’t have a mindset of selling real estate, and we’re restaurant operators,” Schultz said. “We feel the market’s in a great place now, so we’re not afraid to take a few chips off the table, but we don’t want the Tavern to go away.”
The land deal closed on June 26 for $11.5 million in a joint venture between Tennessee development firm Southern Land Co., New York-based investment company GTIS Partners and Tavern Hospitality Group.
“If I decided to walk away from the land and didn’t want to put a Tavern back, the deal would have been bigger,” Schultz said. “But we didn’t want to walk away; I wanted to put a Tavern back there.”
Southern Land is planning a 315-unit apartment complex for the site. THG will have ownership of a 14,000-square-foot retail space at the base of the building. The space will be big enough for a new Tavern Uptown and one other retail tenant, Schultz said.
It’s a deal Schultz said was well-timed, because he was already drawing up plans to renovate Tavern Uptown.
In its new restaurant, Tavern will have a 7,500-square-foot first-floor restaurant with 4,000 square feet of deck space on the roof of the eight-story development. Restaurant patrons will access the rooftop space through a high-speed elevator, Schultz said.
“We lose our courtyard patio, and it’s going to be a sad day when I have to take down the tree in the middle,” Schultz said. “But from the eighth floor, we don’t think there’s going to be anything like the view.”
Schultz said he does not have a tenant lined up yet for the second ground-floor retail space but will be looking for a place to complement his own restaurant, such as a coffee shop or a breakfast spot.
The current Tavern Uptown will stay open until early next year. Schultz said the plan is to keep it running until the Super Bowl. Demolition will begin shortly after the final whistle, and Schultz said the development would take between 14 and 18 months to build.
Schultz said the company looked at preserving the Tavern building at 17th Avenue and Pearl Street early in the planning process but said it wouldn’t be possible to put an apartment building atop the structure.
A 27-unit apartment building at 16th Avenue and Pearl Street will also come down to make way for the new project.
Zoning at the space allows for eight floors of construction on most of the plot, with only five stories on a small section fronting 16th Avenue.
While Tavern Uptown is under construction, THG will look to move the restaurant’s employees to its other businesses around Denver. The company owns a slew of other Tavern-branded eateries, as well as the Soiled Dove Underground beneath Tavern Lowry and Cowboy Lounge next to Tavern Downtown.
Southern Land Co. will have a pair of king-sized Denver apartment projects under construction once it digs into Uptown. The company is currently building a 302-unit apartment building at 18th and Central streets in LoHi.
Company CFO Ken Howell said the Uptown apartment project would cost between $70 million and $80 million to build. He anticipates delivering the first apartment units in summer 2017, and he said he liked the site for its location near downtown, 17th Avenue restaurants, hospitals and parks.
“We probably have a dozen boxes we like to check off in site-selection mode,” Howell said. “We like to be near jobs, bars, restaurants and public amenities like parks, public infrastructure and public transportation.”