The building at 101 W. Colfax Ave. opened in 2006. (BusinessDen file)
The Denver City Council on Tuesday signed off on a deal to buy the former Denver Post building downtown, but the body still has to approve the financing arrangement at a later date in order for the deal to close.
The $88.5 million purchase agreement was approved with a 9-4 vote. Council members Shontel Lewis, Flor Alvidrez, Sarah Parady and Serena Gonzales-Gutierrez voted no.
Some of those who voted yes, however, still expressed skepticism about the deal.
“Can you explain how this makes sense for us to do this now when agencies are being asked to cut their budget by 10-15 percent?” asked Councilwoman Amanda Sandoval, referring to Mayor Mike Johnston’s request related to the city’s deluge of migrants.
Councilman Kevin Flynn encouraged his skeptical colleagues to vote yes on Tuesday, noting that the council will in the coming weeks be asked to approve the issuance of certificates of participation, or COPs, to finance the acquisition. He noted they could still kill the deal by voting down the COP financing.
“I would suggest keeping this alive so we can at least take advantage of the answers to the questions that are still forthcoming,” Flynn told his colleagues.
The 11-story, 305,000-square-foot building has been owned since 2006 by an affiliate of New York-based American Properties, which paid $93.42 million for it, records show. The Johnston administration has said the structure will allow for future expansion of the district, county, probate and juvenile courts.
The building was completed in 2006 for The Denver Post and Rocky Mountain News, the city’s two dominant newspapers at the time. The Rocky, where Flynn worked as a reporter, folded in 2009. The Post moved operations out of the building several years ago but has a lease for the entire structure through September 2029. The newspaper has been subleasing the space to a number of tenants, including the city.
The Post pays $649,550 monthly — $7.79 million annually — in rent through September 2026, according to the purchase agreement. That then increases to nearly $715,000 monthly, or $8.57 million annually, through the end of the lease term.
Lisa Lumley, the city’s real estate director, emphasized that the Post’s rent will be equal or greater than the amount that the city pays under the COP arrangement during the initial years.
“This is going to be general fund neutral through 2029,” Lumley said.
The council was originally supposed to make a decision on the purchase on Jan. 2, but delayed the vote for two weeks due to questions about the deal. On Tuesday, members indicated some of those questions, along with some new ones, were still lingering.
Alvidrez said she wanted to know how much the city was paying to sublease space in the building currently, and what it would cost to buy the Post out of its lease. Councilman Paul Kashmann asked about how much it would cost the city to renovate the building for its needs; Lumley said it could be $2 million or more per courtroom based on past experience.
Lewis, meanwhile, said it seemed like the city could get a better deal by buying a nearby office building in default or foreclosure, rattling off the Denver Energy Center, Wells Fargo Center and Columbine Place as options. She said the city could likely save money by buying later.
“Why would we not want to wait at least a few months since the need for this building doesn’t start until 2030?” she asked. “The commercial real estate market is becoming buyer-friendly.”
Lewis said she was “increasingly concerned about the commercial real estate deals” being presented to the council. She alluded to decisions last year to lease three floors atop Republic Plaza for the Denver District Attorney’s Office, and then more space elsewhere in the building to help revitalize downtown. The tower’s owner, which had been in default on its loan, was able to extend with its lender.
“The taxpayers have bailed out Republic Plaza, with no benefit to them, and now this deal feels the same,” said Lewis, who also questioned whether the court system needs as much space to expand as proposed.
Flynn and Councilman Chris Hinds noted that the buildings in receivership tend to be older. Lumley said another advantage of the Post building is that there’s just one tenant, making negotiations easier.
“The city cannot just assume leases like a private-sector owner can when we buy a building,” she said.
Lumley noted the Post building’s proximity to other city and county offices, and indicated that officials have expressed concerns about staff having to travel significant distances downtown.
“They were concerned about the safety and security of their attorneys going back and forth,” Lumley said of the DA’s office.
Lumley said the details regarding the COP financing could go before council next month. If approved, the purchase could close in late March or early April, she said.
The building at 101 W. Colfax Ave. opened in 2006. (BusinessDen file)
The Denver City Council on Tuesday signed off on a deal to buy the former Denver Post building downtown, but the body still has to approve the financing arrangement at a later date in order for the deal to close.
The $88.5 million purchase agreement was approved with a 9-4 vote. Council members Shontel Lewis, Flor Alvidrez, Sarah Parady and Serena Gonzales-Gutierrez voted no.
Some of those who voted yes, however, still expressed skepticism about the deal.
“Can you explain how this makes sense for us to do this now when agencies are being asked to cut their budget by 10-15 percent?” asked Councilwoman Amanda Sandoval, referring to Mayor Mike Johnston’s request related to the city’s deluge of migrants.
Councilman Kevin Flynn encouraged his skeptical colleagues to vote yes on Tuesday, noting that the council will in the coming weeks be asked to approve the issuance of certificates of participation, or COPs, to finance the acquisition. He noted they could still kill the deal by voting down the COP financing.
“I would suggest keeping this alive so we can at least take advantage of the answers to the questions that are still forthcoming,” Flynn told his colleagues.
The 11-story, 305,000-square-foot building has been owned since 2006 by an affiliate of New York-based American Properties, which paid $93.42 million for it, records show. The Johnston administration has said the structure will allow for future expansion of the district, county, probate and juvenile courts.
The building was completed in 2006 for The Denver Post and Rocky Mountain News, the city’s two dominant newspapers at the time. The Rocky, where Flynn worked as a reporter, folded in 2009. The Post moved operations out of the building several years ago but has a lease for the entire structure through September 2029. The newspaper has been subleasing the space to a number of tenants, including the city.
The Post pays $649,550 monthly — $7.79 million annually — in rent through September 2026, according to the purchase agreement. That then increases to nearly $715,000 monthly, or $8.57 million annually, through the end of the lease term.
Lisa Lumley, the city’s real estate director, emphasized that the Post’s rent will be equal or greater than the amount that the city pays under the COP arrangement during the initial years.
“This is going to be general fund neutral through 2029,” Lumley said.
The council was originally supposed to make a decision on the purchase on Jan. 2, but delayed the vote for two weeks due to questions about the deal. On Tuesday, members indicated some of those questions, along with some new ones, were still lingering.
Alvidrez said she wanted to know how much the city was paying to sublease space in the building currently, and what it would cost to buy the Post out of its lease. Councilman Paul Kashmann asked about how much it would cost the city to renovate the building for its needs; Lumley said it could be $2 million or more per courtroom based on past experience.
Lewis, meanwhile, said it seemed like the city could get a better deal by buying a nearby office building in default or foreclosure, rattling off the Denver Energy Center, Wells Fargo Center and Columbine Place as options. She said the city could likely save money by buying later.
“Why would we not want to wait at least a few months since the need for this building doesn’t start until 2030?” she asked. “The commercial real estate market is becoming buyer-friendly.”
Lewis said she was “increasingly concerned about the commercial real estate deals” being presented to the council. She alluded to decisions last year to lease three floors atop Republic Plaza for the Denver District Attorney’s Office, and then more space elsewhere in the building to help revitalize downtown. The tower’s owner, which had been in default on its loan, was able to extend with its lender.
“The taxpayers have bailed out Republic Plaza, with no benefit to them, and now this deal feels the same,” said Lewis, who also questioned whether the court system needs as much space to expand as proposed.
Flynn and Councilman Chris Hinds noted that the buildings in receivership tend to be older. Lumley said another advantage of the Post building is that there’s just one tenant, making negotiations easier.
“The city cannot just assume leases like a private-sector owner can when we buy a building,” she said.
Lumley noted the Post building’s proximity to other city and county offices, and indicated that officials have expressed concerns about staff having to travel significant distances downtown.
“They were concerned about the safety and security of their attorneys going back and forth,” Lumley said of the DA’s office.
Lumley said the details regarding the COP financing could go before council next month. If approved, the purchase could close in late March or early April, she said.
