Ignore the signage: The Denver Post’s last connection to its downtown building is set to be severed.
DP Media Network, an entity affiliated with the newspaper, is working to sublease the top floor of the 11-story building at 101 W. Colfax Ave. to the city of Denver. A City Council committee reviewed the planned agreement last week.
Employees of the Post’s parent company, MediaNews Group, have been using the 11th floor, according to Westword.
Other components of the Post, including its newsroom, left the building in the past two years for the newspaper’s printing facility at 5990 Washington St., which is in a largely industrial area.
The Post’s general manager did not respond to a request for comment regarding whether Denver Post signage will remain atop the structure. The building’s past also is suggested by a ticker that wraps around a portion of its facade and displays news headlines in real time.
The city already has subleased four other floors of the building — floors 1, 7, 8 and 9 — from the Post, some of it since 2016. Departments that work in the building include Parks and Recreation, Public Health and Environment, and the Office of Emergency Management. Other noncity entities occupy the remaining floors.
Provided council ultimately approves the deal, the city will pay $32 a square foot gross initially to sublease the 25,193-square-foot floor, for a total of $9.88 million for the lease term, which would run from May 2020 through October 2029. The city will get a tenant improvement allowance of $151,930.
“It’s significantly below market,” Jeff Steinberg, the city’s director of real estate, told council members Tuesday. “Market rents today are probably in the $30 to $35 range net, and operating expenses for most downtown buildings are running between $12 and $15, some as much as $18 a square foot. So we are at least 30 percent below market.”
Steinberg emphasized that the building is already “wired on the city network” because of the existing use of the building, and “about as close to the Webb building as you can get.”
He noted that getting space below market rate is typical when it comes to subleases, and not the result of the Post giving the city a deal it wouldn’t offer other entities.
“The rest of the building is occupied by other subtenants, and what they’re doing is mitigating their losses,” Steinberg said of the Post.
Steinberg indicated that the city plans to gradually renovate the adjacent Webb building, which will involve moving employees to another location temporarily.
“Primarily it’s going to be used as swing space so that we can redo floors within the Webb building,” he said of the 11th floor.
The building at 101 W. Colfax was built specifically for the Post and the Rocky Mountain News, a tabloid competitor that folded in 2009. The separate newsrooms and their shared business operations moved into the building in 2006.
The building cost $88 million to build, according to a 2006 story in the Post. It was developed with a synthetic lease, a financing structure in which the building was owned by Atlanta-based SunTrust Equity Funding and backed by a long-term lease agreement from the newspapers, according to the Colorado Real Estate Journal.
Shortly after the building was completed in 2006, SunTrust sold the building to Co-Newspaper LLC, which quickly flipped it to New York-based American Properties for $93.42 million, according to public records.
“We want our capital investments in newspapers, not real estate,” Dean Singleton, then-CEO of MediaNews Group, said in 2006.