The building at 101 W. Colfax Ave. opened in 2006. (BusinessDen file)
Mayor Mike Johnston’s administration hopes to close on the purchase of the former Denver Post building the week of April 8, but some City Council members continue to question the wisdom of the buy.
The council voted 9-4 in January to approve an $88.5 million purchase agreement for the 11-story, 305,000-square-foot building at 101 W. Colfax Ave. But the body now must approve a second measure, which lays out how the city will finance the purchase, in order for the deal to close.
That measure, authorizing the execution of certificates of financing up to $90 million, went before a council committee on Tuesday, and will be voted on by the full council next month.
At the meeting, council members Amanda Sandoval and Jamie Torres, both of whom voted in favor of the purchase agreement, expressed some skepticism about the financing deal.
“I can’t even say that I’m fully on board yet for our final vote,” Torres said.
That suggests the final vote could be a close call if their four colleagues who opposed the purchase agreement — Shontel Lewis, Flor Alvidrez, Sarah Parady and Serena Gonzales-Gutierrez — again vote no.
Sandoval requested a host of information from officials in the city’s finance department and continued to question whether the city was paying a reasonable price.
“From the analysis that I’ve gotten, we are getting this building really expensive,” she said.
“It seems like there’s this contradiction. We’re facing a $180 million budget shortfall, we barely recovering from COVID. Why are we doing this transaction now?”
The 101 W. Colfax Ave. building has been owned since its 2006 completion by an affiliate of New York-based American Properties, which records show paid $93.42 million. The structure is master leased through late 2029 by The Denver Post, which moved out years ago but is still responsible for paying rent until its lease expires.
Lisa Lumley, the city’s real estate director, said the Post subleases about half the building to the city along with at least two other tenants. The remaining space is unused.
“So, we’re buying a building that is 50 percent leased?” Sandoval asked.
“No, we’re buying a building that is 100 percent paid for through their tenant lease,” Lumley responded. “That is the difference.”
If the sale goes through, the city expects to pay about $6.8 million annually on the certificates of participation, a form of financing that pledges city assets as collateral. That would be less than the $7.8 million to $8 million the Post will pay annually in rent through 2029.
Lumley said the city also won’t be responsible for maintaining the building while the Post’s lease is in place.
Lumley defended the $88.5 million price tag, saying the valuation reflects what the Post will pay in rent for the next five years. Some council members have noted that other buildings nearby are largely vacant or in default.
“Not every building that some folks have brought forward are truly comparable buildings based on class and size,” Lumley said.
The building at 101 W. Colfax Ave. opened in 2006. (BusinessDen file)
Mayor Mike Johnston’s administration hopes to close on the purchase of the former Denver Post building the week of April 8, but some City Council members continue to question the wisdom of the buy.
The council voted 9-4 in January to approve an $88.5 million purchase agreement for the 11-story, 305,000-square-foot building at 101 W. Colfax Ave. But the body now must approve a second measure, which lays out how the city will finance the purchase, in order for the deal to close.
That measure, authorizing the execution of certificates of financing up to $90 million, went before a council committee on Tuesday, and will be voted on by the full council next month.
At the meeting, council members Amanda Sandoval and Jamie Torres, both of whom voted in favor of the purchase agreement, expressed some skepticism about the financing deal.
“I can’t even say that I’m fully on board yet for our final vote,” Torres said.
That suggests the final vote could be a close call if their four colleagues who opposed the purchase agreement — Shontel Lewis, Flor Alvidrez, Sarah Parady and Serena Gonzales-Gutierrez — again vote no.
Sandoval requested a host of information from officials in the city’s finance department and continued to question whether the city was paying a reasonable price.
“From the analysis that I’ve gotten, we are getting this building really expensive,” she said.
“It seems like there’s this contradiction. We’re facing a $180 million budget shortfall, we barely recovering from COVID. Why are we doing this transaction now?”
The 101 W. Colfax Ave. building has been owned since its 2006 completion by an affiliate of New York-based American Properties, which records show paid $93.42 million. The structure is master leased through late 2029 by The Denver Post, which moved out years ago but is still responsible for paying rent until its lease expires.
Lisa Lumley, the city’s real estate director, said the Post subleases about half the building to the city along with at least two other tenants. The remaining space is unused.
“So, we’re buying a building that is 50 percent leased?” Sandoval asked.
“No, we’re buying a building that is 100 percent paid for through their tenant lease,” Lumley responded. “That is the difference.”
If the sale goes through, the city expects to pay about $6.8 million annually on the certificates of participation, a form of financing that pledges city assets as collateral. That would be less than the $7.8 million to $8 million the Post will pay annually in rent through 2029.
Lumley said the city also won’t be responsible for maintaining the building while the Post’s lease is in place.
Lumley defended the $88.5 million price tag, saying the valuation reflects what the Post will pay in rent for the next five years. Some council members have noted that other buildings nearby are largely vacant or in default.
“Not every building that some folks have brought forward are truly comparable buildings based on class and size,” Lumley said.
